Springer Proceedings in Business and Economics

Anna Rumyantseva
Hod Anyigba
Elena Sintsova
Natalia Vasilenko Editors

Finance, Economics,
and Industry
for Sustainable
Development
Proceedings of the 3rd International
Scientific Conference on Sustainable
Development (ESG 2022), St. Petersburg
2022
Springer Proceedings in Business and Economics
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Anna Rumyantseva • Hod Anyigba •
Elena Sintsova • Natalia Vasilenko
Editors

Finance, Economics,
and Industry for Sustainable
Development
Proceedings of the 3rd International Scientific
Conference on Sustainable Development (ESG
2022), St. Petersburg 2022
Editors
Anna Rumyantseva Hod Anyigba
St. Petersburg University of Management Nobel International Business School
Technologies and Economics Accra, Ghana
St. Petersburg, Russia

Elena Sintsova Natalia Vasilenko

St. Petersburg University of Management St. Petersburg University of Management
Technologies and Economics Technologies and Economics
St. Petersburg, Russia St. Petersburg, Russia

ISSN 2198-7246 ISSN 2198-7254 (electronic)

Springer Proceedings in Business and Economics
ISBN 978-3-031-30497-2 ISBN 978-3-031-30498-9 (eBook)
https://doi.org/10.1007/978-3-031-30498-9

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Contents

Urban Improvement, Environmental Pollution and Population

Health in the Context of Investment Priorities Working-Out
for Sustainable Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Elena E. Rumyantseva, Anna G. Bezdudnaya, and Miron A. Rastov
Basic Approaches to Counterparty’s Reliability Assessment Under
Implementation of ESG Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Anna Rumyantseva, Natalia Lazareva, and Elena Goncharova
Corporate Management and Sustainable Development: Case
of the Fashion Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Sergey Yu. Solodovnikov, Tatsiana V. Serhiyevich, Vitaly A. Mordovets,
and Tatiana N. Kosheleva
Circular Business Models in Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Sergey Yu. Solodovnikov, Tatsiana V. Serhiyevich, Olga D. Ugolnikova,
and Aleksandr L. Pastukhov
Digitalization of the Housing and Utilities Sector as a Factor of Its
Sustainable Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Vera Fedotova and Olga Ganina
Sustainable Development Financing as a Factor Affecting on
Operational Efficiency of the Company . . . . . . . . . . . . . . . . . . . . . . . . . 47
Anna Rumyantseva and Olga Tarutko
Features of Financing the Green-Digital Way in Russia . . . . . . . . . . . . . 57
Elena Vitsko, Elena Sintsova, and Mikhail Makarov
Innovative Transformations Management in Organizations in the
Context of Its Sustainable Development Under Digital Transformation
of the Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Vladimir A. Kunin and Alexey A. Pestrikov

v
vi Contents

International Legal and Economic Aspects of Ensuring Energy

and Climate Safety in Modern Conditions . . . . . . . . . . . . . . . . . . . . . . . 83
Yuriy V. Mishalchenko, Timofey N. Dovbush,
and Maria Yu. Mishalchenko
Conditions for the Formation of Sustainable Energy in Kazakhstan . . . . 93
Zoya Gelmanova, Anastassiya Mezentseva, Ylia Valeeva,
and Asem Aldabaeva
AgeTech Innovations as an Instrument for Older Population
Inclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Natalia N. Shestakova, Mikhail G. Djanelidze,
and Margarita B. Skvortsova
ESG Concept of Growth in the Outlines of Real and Financial
Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Elena Ivleva, Elena Sintsova, and Nina Shashina
Non-standard Green Buildings and Smart Houses as Way to
Get Additional Financial Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Nataly Sergievskaya
Product Quality Management Through the Prism of Consumption
in Modern Society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Nataly Sergievskaya
Regulation of ESG-Ecosystem: Context and Content Evolution:
Energy Sector Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
Nadezhda N. Pokrovskaia, Vitaly A. Mordovets, and Nataly Yu. Kuchieva
Ecological and Humanitarian Approach to Assessing the Tourist and
Recreational Attractiveness of Cultural Landscapes Drawing on
the Example of the UNESCO World Heritage Site «Curonian Spit» . . . . 181
Babek Asadov, Alexander Baranov, Sofia Baranova, and Inga Philippova
Marketing Communications as a Tool for Sustainable Development
for City-Forming Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
Tatiana Afanasyeva, Elena Torgunakova, and Evgeniy Torgunakov
Sustainable Development Policy and Environmental Sustainability
in the Arctic Territories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201
Elena A. Borkova, Vladimir A. Plotnikov, Oleg G. Smeshko,
and Elena V. Ushakova
Principles of Ecological and Economic Management of Innovative
Development of Heat Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
Valeriya V. Glazkova
Contents vii

Dynamics of Food Security Factors in the Regions of the Arctic

Zone of the Russian Federation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
Ludmila N. Babkina, Oksana V. Skotarenko, and Elena S. Kuznetsova
ESG Rankings to Confirm the Commitment of Universities
to the SDGs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235
Svetlana A. Zhutiaeva, Alexander Yu. Usanov,
and Aleksandra V. Selezneva
Concept of Taking Risk-Tolerant Financial Decisions Under Elevated
Uncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
Vladimir A. Kunin and Stanislav I. Peshko
Reflection of the Sustainable Development Goals in Citizen Science
Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261
Natalia Vasilenko and Anna Rumyantseva
Personnel Risks of Media Organizations: An Approach from the
Standpoint of the ESG Concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271
Vladimir A. Plotnikov and Olga A. Shamina
Analysis of the Estimation and Impact Methodology of Tax
Evasion for Industrial Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283
Nicu Șargu, Ylia Valeeva, Angela Timus, and Evgeny Yelesin
Selection of Methods for Assessing the Resultativeness of the
Company’s Adaptation to Market Conditions . . . . . . . . . . . . . . . . . . . . 297
Natalia Meshkova, Julia Stepanova, and Svetlana Kudinova
Institutional Support of ESG-Initiatives Implementation for
Sustainable Development Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
Nataliya V. Shekhova, Vitaly A. Mordovets, Olga A. Smirnova,
and Ivan A. Shekhov
Eye Tracking as a Research and Training Tool for Ensuring
Quality Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317
Marianna Ababkova, Irina Melnikova, and Olga Vasileva
Improving the Methodology for Calculating the Index of Growth
of Small and Medium-Sized Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . 329
Elena V. Yaluner, Mikhail G. Voronin, and Alexey B. Zelensky
Transformation of Electricity Markets in the Eurasian Economic
Union Member States: Problems and Prospects of Liberalization . . . . . . 341
Vahe Davtyan, Ylia Valeeva, Gulnara Valeeva, and Maria Vaganova
viii Contents

The Contribution of Ecological and Medical Tourism to Sustainable

Development Based on the Potential of Radon Water Springs
in the Leningrad Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351
Artur V. Sauts, Pavel V. Zhukov, and Svetlana V. Eregina
Contributors

Marianna Ababkova Saint-Petersburg Electrotechnical University “LETI”, St.

Petersburg, Russian Federation
Tatiana Afanasyeva Saint-Petersburg University of Management Technologies
and Economics, St. Petersburg, Russian Federation
Asem Aldabaeva Karaganda Industrial University, Temirtau, Kazakhstan
Babek Asadov Saint-Petersburg University of State Fire Service of EMERCOM of
Russia, St. Petersburg, Russian Federation
Ludmila N. Babkina Saint-Petersburg State University of Civil Aviation named in
honor of Air Chief Marshal A.A. Novikov, St. Petersburg, Russian Federation
Alexander Baranov Herzen State Pedagogical University of Russia, St. Peters-
burg, Russian Federation
Sofia Baranova Herzen State Pedagogical University of Russia, St. Petersburg,
Russian Federation
Anna G. Bezdudnaya Saint-Petersburg State University of Economics, St. Peters-
burg, Russian Federation
Elena A. Borkova Saint-Petersburg State University of Economics, St. Petersburg,
Russian Federation
Vahe Davtyan Russian-Armenian University, Yerevan, Armenia
Mikhail G. Djanelidze Institute for Regional Economic Studies Russian Academy
of Science, St. Petersburg, Russian Federation
Timofey N. Dovbush Saint-Petersburg Institute (branch) of the All-Russian State
University of Justice (RPA of the Ministry of Justice of Russia), St. Petersburg,
Russian Federation
Svetlana V. Eregina Vologda State University, Vologda, Russian Federation

ix
x Contributors

Vera Fedotova Saint-Petersburg University of Management Technologies and

Economics, St. Petersburg, Russian Federation
Olga Ganina Perm National Research Polytechnic University, Perm, Russian
Federation
IT-company «Digital Ombudsman for Resident», Perm, Russian Federation
Zoya Gelmanova Karaganda Industrial University, Temirtau, Kazakhstan
Valeriya V. Glazkova Moscow State University of Civil Engineering (National
Research University), Moscow, Russian Federation
Elena Goncharova Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
Elena Ivleva Saint-Petersburg University of Management Technologies and Eco-
nomics, St. Petersburg, Russian Federation
Tatiana N. Kosheleva Saint-Petersburg University of Management Technologies
and Economics, St. Petersburg, Russian Federation
Saint-Petersburg State University of Civil Aviation named in honor of Air Chief
Marshal A.A. Novikov, St. Petersburg, Russian Federation
Nataly Yu. Kuchieva Federal Antimonopoly Service Administration for
St. Petersburg, St. Petersburg, Russian Federation
Svetlana Kudinova Gzhel State University, Electroizolyator, Russian Federation
Vladimir A. Kunin Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
Elena S. Kuznetsova Murmansk State Technical University, Murmansk, Russian
Federation
Natalia Lazareva Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
Mikhail Makarov Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
Irina Melnikova Peter the Great St. Petersburg Polytechnic University, St. Peters-
burg, Russian Federation
Natalia Meshkova Moscow State University of Civil Engineering (National
Research University), Moscow, Russian Federation
Anastassiya Mezentseva Karaganda Industrial University, Temirtau, Kazakhstan
Maria Yu. Mishalchenko Saint-Petersburg State Marine Technical University, St.
Petersburg, Russian Federation
Contributors xi

Yuriy V. Mishalchenko Saint-Petersburg Institute (branch) of the All-Russian

State University of Justice (RPA of the Ministry of Justice of Russia), St. Petersburg,
Russian Federation
Vitaly A. Mordovets Saint-Petersburg University of Management Technologies
and Economics, St. Petersburg, Russian Federation
Aleksandr L. Pastukhov Saint-Petersburg University of Management Technolo-
gies and Economics, St. Petersburg, Russian Federation
North-Western Institute of Management, Branch of the Russian Presidential Acad-
emy of National Economy and Public Administration, St. Petersburg, Russian
Federation
Stanislav I. Peshko Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
Alexey A. Pestrikov Saint-Petersburg University of Management Technologies
and Economics, St. Petersburg, Russian Federation
Inga Philippova Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
Vladimir A. Plotnikov Saint-Petersburg State University of Economics, St. Peters-
burg, Russian Federation
Saint-Petersburg University of Management Technologies and Economics, St.
Petersburg, Russian Federation
Nadezhda N. Pokrovskaia Saint-Petersburg University of Management Technol-
ogies and Economics, St. Petersburg, Russian Federation
Saint-Petersburg Electrotechnical University “LETI”, St. Petersburg, Russian
Federation
Peter the Great St. Petersburg Polytechnic University, St. Petersburg, Russian
Federation
Herzen State Pedagogical University of Russia, St. Petersburg, Russian Federation
Immanuel Kant Baltic Federal University, Kaliningrad, Russian Federation
Miron A. Rastov Saint-Petersburg State University of Economics, St. Petersburg,
Russian Federation
Anna Rumyantseva Saint-Petersburg University of Management Technologies
and Economics, St. Petersburg, Russian Federation
Elena E. Rumyantseva National Research University “Higher School of Econom-
ics”, Moscow, Russian Federation
Nicu Șargu Academy of Economic Studies of Moldova, Chișinău, Republic of
Moldova
Artur V. Sauts Saint Petersburg State Chemical and Pharmaceutical University of
the Ministry of Healthcare of the Russian Federation, St. Petersburg, Russian
Federation
xii Contributors

Saint-Petersburg University of Management Technologies and Economics, St.

Petersburg, Russian Federation
Aleksandra V. Selezneva Saint-Petersburg State University of Economics, St.
Petersburg, Russian Federation
Nataly Sergievskaya Moscow State University of Civil Engineering (National
Research University), Moscow, Russian Federation
Tatsiana V. Serhiyevich Belarusian National Technical University, Minsk,
Republic of Belarus
Olga A. Shamina Saint-Petersburg State University of Industrial Technologies and
Design St. Petersburg, Russian Federation
Nina Shashina Saint-Petersburg Electrotechnical University “LETI”, St. Peters-
burg, Russian Federation
Nataliya V. Shekhova Saint-Petersburg State University of Economics, St. Peters-
burg, Russian Federation
Ivan A. Shekhov Saint-Petersburg State University of Economics, St. Petersburg,
Russian Federation
Natalia N. Shestakova Institute for Regional Economic Studies Russian Academy
of Science, St. Petersburg, Russian Federation
Elena Sintsova Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
Oksana V. Skotarenko Murmansk Arctic State University, Murmansk, Russian
Federation
Military Educational Institution of Logistics named after General of the Army
A.V. Кhrulyov, St. Petersburg, Russian Federation
Margarita B. Skvortsova Institute for Regional Economic Studies Russian Acad-
emy of Science, St. Petersburg, Russian Federation
Oleg G. Smeshko Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
Olga A. Smirnova Saint-Petersburg State University of Economics, St. Petersburg,
Russian Federation
Sergey Yu. Solodovnikov Belarusian National Technical University, Minsk,
Republic of Belarus
Julia Stepanova Lugansk Vladimir Dahl State University, Lugansk, Russian
Federation
Olga Tarutko Saint-Petersburg University of Management Technologies and Eco-
nomics, St. Petersburg, Russian Federation
Contributors xiii

Angela Timus National Institute for Economic Research, Chișinău, Republic of

Moldova
Elena Torgunakova Saint-Petersburg University of Management Technologies
and Economics, St. Petersburg, Russian Federation
Evgeniy Torgunakov Saint-Petersburg University of Management Technologies
and Economics, St. Petersburg, Russian Federation
Olga D. Ugolnikova Saint-Petersburg State University of Economics, St. Peters-
burg, Russian Federation
Alexander Yu. Usanov Financial University under the Government of the Russian
Federation, Moscow, Russian Federation
Elena V. Ushakova Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
Maria Vaganova Kazan Federal University, Kazan, Russian Federation
Gulnara Valeeva Kazan State Agrarian University, Kazan, Russian Federation
Ylia Valeeva Kazan State Power Engineering University, Kazan, Russian
Federation
Natalia Vasilenko Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
Olga Vasileva Herzen State Pedagogical University of Russia, St. Petersburg,
Russian Federation
Elena Vitsko Saint-Petersburg University of Management Technologies and Eco-
nomics, St. Petersburg, Russian Federation
Mikhail G. Voronin Saint-Petersburg University of Management Technologies
and Economics, St. Petersburg, Russian Federation
Elena V. Yaluner Saint-Petersburg State University of Economics, St. Petersburg,
Russian Federation
Institute for Regional Economic Studies Russian Academy of Science, St. Peters-
burg, Russian Federation
Evgeny Yelesin Kazan State Institute of Culture, Kazan, Russian Federation
Alexey B. Zelensky Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
Pavel V. Zhukov Saint-Petersburg University of Management Technologies and
Economics, St. Petersburg, Russian Federation
LLC «Terra», St. Petersburg, Russian Federation
xiv Contributors

Svetlana A. Zhutiaeva Emperor Alexander I St. Petersburg State Transport Uni-

versity, St. Petersburg, Russian Federation
Saint-Petersburg University of Management Technologies and Economics, St.
Petersburg, Russian Federation
Urban Improvement, Environmental
Pollution and Population Health
in the Context of Investment Priorities
Working-Out for Sustainable Development

Elena E. Rumyantseva, Anna G. Bezdudnaya, and Miron A. Rastov

Introduction

Despite the use of international methods of project analysis (developed by the

OECD, the World Bank, UNIDO, FAO and other international organizations), the
investment priorities for the improvement of many countries of the world, including
Russia, as a rule, do not take into account the problems of environmental pollution
and its negative impact on public health (in the international methods of project
analysis, widely used in the development of investment projects and programs, the
aspect of the impact of investments on people’s health is not analyzed, but the
environmental and social aspects are formally present). In particular, it is expressed
in the lack of compliance with environmental safety requirements in the construction
of residential and industrial facilities in practice, although in scientific terms this
topic has been developed quite deeply and long ago (Rumyantseva, 2008), but is not
taken into account in the legislation, is not implemented at the level of initiatives of
public and private customers and developers. And landscaping, including urban
areas greening (often formal, not based on calculations related to air purification and
assessments of the prospective state of public health), is mainly designed to increase
only the commercial (and/or budgetary) attractiveness of the construction projects
taken into use, to satisfy mainly aesthetic needs of residents of a particular city,
district, etc. In addition, hastily planted green spaces (for the success of the facility
commissioning or work under administrative pressure) often dry out during the next
year after planting, thereby creating losses from this activity. According to the

E. E. Rumyantseva
National Research University “Higher School of Economics”, Moscow, Russian Federation
A. G. Bezdudnaya · M. A. Rastov (✉)
Saint-Petersburg State University of Economics, St. Petersburg, Russian Federation
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 1

A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_1
2 E. E. Rumyantseva et al.

authors, this fate covers at least a third of the green spaces of Moscow (including due
to the lack of watering, planting in unprepared depleted soil, neglect of fertilization,
unprofessional choice of planting site, as well as the performance of work on the
current improvement of territories not on planned-scientific basis, but exclusively at
the request of individual concerned residents, uploaded to the Our City web-portal).
At the same time, the results of international scientific studies draw attention to the
importance of revising approaches to the development of investment priorities for
the improvement of most countries of the world, including Russia, with the inclusion
of indicators of the public health state dependence on the degree of environmental
pollution and the significant role of greening in improving the ecology of living in
one area or another.
In Europe, acting in the papers of Russian researchers as a progressive guide for
the development of Russia in many areas, the task is also set to develop and adopt
rules for assessing the impact of buildings on the environment and human health
based on the application of the European Regulation on Construction Products by
the Member States of the European Union (Gartiser et al., 2017).
The purpose of this study is to form a significant holistic scientific understanding
of the relationship between the theory and practice of urban improvement with air
pollution, greening and public health based on the application of an interdisciplinary
approach and the method of causal relationships, and to propose changes to the
requirements for development and implementation of investment projects and pro-
grams in this area, standardized by state bodies and professional communities, on
this basis.

Materials and Methods

One of the main sources of information on this issue is the papers of international
organizations based on system analysis, the method of international comparisons,
causal relationships and the interdisciplinary approach with a focus on the reliability
of information sources, protection of the interests of the majority of the population of
the countries of the world and the depth of scientific study, the achievement of
scientific maturity and the investment decisions authenticity. According to the World
Health Organization (WHO), air pollution is one of the most significant environ-
mental risks of excess morbidity and premature mortality. According to the stan-
dards of this international organization, almost the entire population of the world
(99% of the world’s inhabitants) lives in conditions of air pollution beyond the
maximum permissible standards established by WHO as a result of long-term
anthropogenic pressure on the environment. And this poses a threat to the health
of many people (World Health Organization, 2022). The World Air Quality Index,
calculated on the basis of the US Environmental Protection Agency Standard,
identifies significantly more areas of the planet with small and moderate air pollu-
tion, using less demanding standards than WHO, but pays attention to the indicator
of differentiation of pollution levels in neighboring territories. For example, in this
Urban Improvement, Environmental Pollution and Population Health in. . . 3

version of global monitoring that is milder in terms of maximum permissible levels

of pollution, Russia, together with the United States and Kyrgyzstan, forms a group
of countries with a high differentiation of air pollution levels (from safe to the most
dangerous one for human health), even within Moscow and other regions (World Air
Quality Index project, 2022). Russian official sources also confirm the high differ-
entiation of pollution levels. For example, in accordance with the official data of the
North-Western Department for Hydrometeorology and Environmental Monitoring
FSBI, on Russian standards of maximum permissible pollution, in September 2022
the level of air pollution in the cities of the Leningrad Region was assessed as
increased one in Kirishi and as low one in Vyborg, Kingisepp and Luga (Federal
State Budgetary Institution «North-Western Department for Hydrome-teorology and
Environmental Monitoring», 2022).
The State Darwin Museum website simply informs that “more than 1200 types of
pollutants enter the aerial environment of Moscow. The main and most dangerous
ones are: nitrogen dioxide, carbon monoxide, sulfur dioxide, ammonia, heavy metal
compounds, dust, soot, asbestos, phenol, hydrogen cyanide, xylene, toluene, gaso-
line” (State Darwin Museum, 2001). With such a flow of pollutants, the presentation
of air quality in many cities of Russia as “good” by a number of official sources
seems implausible and requires additional verification (including the accuracy of
equipment locations), especially in the context of a lack of monitoring stations
(Moroshkina & Dranishnikova, 2021) and the risk of overwriting, embellishing
reality under pressure of corruption instead of drawing public attention to solving
health problems. Because of the use of methods for assessing air quality that differ
greatly in terms of maximum permissible standards and the presence in the countries
of the world, including Russia, a serious problem of information distortion, it seems
relevant to conduct independent public studies along with closed institutional studies
of air quality, compare different sources of information on air quality at one and the
same object and draw conclusions on this basis.
Sources for the preparation and dissemination of information among the popula-
tion characterizing the air quality in Moscow as “good” or “safe for health” differ
significantly in the conclusions of the analysis from air quality monitoring by
Greenpeace, for example, that presented a significant number of local places of air
pollution only on the map of Moscow and the Moscow Region, identified as a result
of the analysis of 5625 complaints about landfill gases, industrial emissions and
unidentified sources (but without specifying the consequences of pollution for
human health) (Yablokov et al., 2017).

Results and Discussion

Outdoor air pollution (outdoor air characterized as even worse in quality than
atmospheric air) in both urban and rural areas, classified as carcinogenic to humans
by the WHO International Agency for Research on Cancer (IARC) in 2013, is the
cause of 7 million premature deaths worldwide (World Health Organization, 2021).
4 E. E. Rumyantseva et al.

According to the UN, almost a third of all deaths from strokes, chronic respiratory
diseases and lung cancer, as well as a quarter of deaths from heart attacks (out of
these 7 million annual deaths) are caused by air pollutants (United Nations, 2019)
tied to industrial activities, automobile exhaust, dust, unsatisfactory collection and
recycling of garbage, lack of state and public control over dog walking, etc.
Researchers from around the world pay attention to the relationship between air
pollution, greening and the risk of developing cardiovascular diseases (Gascon et al.,
2016), cancer of the bladder, lung, prostate, breast (Terre-Torras et al., 2022),
general health of the population, its mental health and mortality from all causes
(Van den Berg et al., 2015). An analysis of 189 articles, published in 2020–2022, led
the researchers from the Netherlands and China to the conclusion that urban green
spaces have been identified as a key factor in improving the urban population health.
At the same time, the green area quality plays an important role in the people’s
perception of the greening work results, since abandoned areas overgrown with
shrubs and other unkempt places, lanes of green spaces formed along highways, etc.
are invisible, inaccessible and unattractive to citizens and therefore cannot be
identified on the GIS map as a green area (Zhang et al., 2022). In addition, studies
draw attention to the fact that urban green spaces (of good quality, in sufficient
quantity and with all the necessary care for them) provide not only water and air
filtration, but also noise pollution buffering, create a habitat for animals and birds;
they reduce heat stress in cities, significantly expand opportunities for people to relax
in urban conditions, are significant places of aesthetic value, inspiration, spiritual
experience and education for many people, are convenient for conducting thematic
field trips for various educational programs, and even cause a decrease in the crime
rate (Ogletree et al., 2022).
The remoteness of green areas from the places of residence is one of the signs of
the life inequality in cities, even the most comfortable ones. Belgian scientists draw
attention to the relevance of the study of supply and demand for urban green spaces,
emphasizing that cities are faced with the problem of a fair supply of high-quality
green spaces that meet the demand of residents. According to them, as a rule, the
poorest areas are the least planted and with the least quality trees, shrubs and flowers
(with their great diversity in the green space market) (Phillips et al., 2022).

Conclusion

Overwhelming evidence of the public health state dependence on the level of air
pollution and the development of directions for spending on greening allows the
authors to conclude that it is necessary to analyze the air pollution levels using
different methods and international comparisons and identify sources of pollution for
further work with them; gives grounds for making changes to the standardized
requirements for the development and implementation of investment programs in
the field of urban improvement with the inclusion of measures for “smart” gardening
and assessments of the consequences of investment activities for the health of the
Urban Improvement, Environmental Pollution and Population Health in. . . 5

urban population (as part of deepening the environmental and social aspects in the
international project analysis methodology used in Russia) in these programs as well
as in the Russian legislation. Correction of the situation with underestimation of the
connection between urban improvement, environmental pollution and changes in the
population health state is facilitated by the use of the WHO concept of Healthy Cities
in Russia that is universal for all countries of the world (World Health Organization
& UN-Habitat, 2018), its further development and promotion both in the methodo-
logical terms (development of methods assessing the quality, sufficiency and acces-
sibility of green spaces to places of residence), and in terms of conducting
international comparisons, sociological surveys to determine the degree of satisfac-
tion of people’s needs for green spaces in their places of residence, work and
recreation, as well as awareness of the importance of checking information sources
on their credibility. Researchers include the use of mobile treatment plants (Fedotov
et al., 2017), the transition from a system of poor air quality management to effective
management, the safe disposal of waste (Al Huraimel et al., 2022) instead of their
accumulation (as is still happening in Russia) (Rumyantseva, 2019), etc. to the list of
methods for improving air quality, methods that are relevant and meaningful to use
at all levels of government and civil initiatives today.

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Basic Approaches to Counterparty’s
Reliability Assessment Under
Implementation of ESG Technologies

Anna Rumyantseva, Natalia Lazareva, and Elena Goncharova

Introduction

The globalization of economic processes, the increasing influence of digitalization

on the development of new technologies and tools in business valuation and
forecasting system, which identifies the most important areas of business develop-
ment, enable organizations to solve the problems of survival and ensure the growth
of performance efficiency. Recently, such non-financial reporting indicators as
“social”, “environmental (green)”, “corporate governance” have recently begun to
appear more frequently in the annual reports of companies that follow global trends
and maintain their business reputation.
With the growth of environmental problems in the global economic space, the
problems of “green” and social planning and corporate governance become partic-
ularly important. The question of counterparty’s reliability is a matter of concern for
all business participants not only in the course of business activities but also at the
preliminary stage of preparing contracts for conclusion. At this stage, the organiza-
tional leadership faces the major challenge: to prevent interactions with potentially
unreliable suppliers and customers. A comprehensive research, confirming the
counterparty’s reliability, allows to build healthy partnerships and avoid many
risks. Checking the counterparty before entering into business contracts by means
of special resources and a set of criteria developed and systematized by the authors,
will improve the business reputation and rating, and avoid unpredictable outcome
arising from “communication” with an unreliable counterparty. At the present time,
socially responsible investors and shareholders adhere to the ESG approach when
checking the counterparties’ investment projects, taking into account the companies’

A. Rumyantseva · N. Lazareva · E. Goncharova (✉)

Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 7

A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_2
8 A. Rumyantseva et al.

environmental impact, the specific features of fund formation, preservation of funds

and its efficient usage (increment).

Materials and Methods

In order to confirm the hypothesis and to obtain the necessary data to analyze the
implementation of ESG concept in Russia, the survey of 100 respondents was
conducted. Among the respondents were specialists from the industrial enterprises,
the scientific community, the field of stock market, as well as scientists and univer-
sity students. Geographically, respondents were located in Moscow, Saint Peters-
burg, Ufa, Rostov-on-Don, Stavropol, Krasnodar, as well as Los Angeles, Hamburg,
Dusseldorf. Among the interviewees were employees of Research and Development
Enterprise “BURINTEKH”, Ltd (Ufa); the head of “GRIFON-EXPERT”, LLC
(Saint Petersburg), CJSC “Techservice” (Georgiyevsk, Stavropol krai),
“Kamyshinsky Crane Plant”, LLC; FSBEI RSUE “RINH” (Rostov-on-Don); as
well as entrepreneurs of small and medium-sized enterprises, teachers and students
from the universities of Moscow, Saint Petersburg, Krasnodar, Rostov-on-Don,
Volgograd and other cities. The majority of the respondents are well-versed in the
topic of ESG indicators and believe that it should be taken into account when
assessing the counterparty’s reliability. Nevertheless, the respondents from Russia
do not consider such indicators as the environmental approach and the company’s
social program to be important. This is confirmed by the results of the survey. So,
82% of respondents answered “Yes” to the question “Do you consider it necessary to
take into account company’s credit rating when assessing the counterparty’s reli-
ability?” (Fig. 1).
However, only 40.9% of respondents answered “Yes” to the question “Is the
environmental performance indicators of the company, the quality of the information
in the reporting, important for making a decision to sign an agreement with a
counterparty?”. This confirms the fact that the Russian Federation has not yet formed
a sufficiently strong mentality regarding the need and the importance of developing
“green economy trends” (Fig. 2).

Yes, it is necessary
No, I don’t think it is important
Only for customers and consumers
In conjunction with other types of assessments

Fig. 1 Survey results on the necessity to assess the company’s credit rating when forming an
opinion on its reliability
Basic Approaches to Counterparty’s Reliability Assessment. . . 9

No, I don’t think it is important

Only for customers and consumers
Only for suppliers and contractors
Yes, it is necessary
In 2022 it is desirable
In certain activities

Fig. 2 Survey results on the necessity to consider environmental performance indicators when
entering into contracts with counterparties

The information was collected using Google form over a period of 2 weeks. The
respondents were offered to answer the questionnaire, which included seven ques-
tions, and were asked to choose one answer or suggest their own answer. The data
obtained were analyzed, using statistical methods, including methods of descriptive
statistics, systematized and interpreted. The authors came to the conclusions, which
they consider important for the development of new mentality for Russian business
participants in the context of the implementation of ESG technologies, the introduc-
tion of the new term “technical company” (1-day firm) and the growing importance
of corporate environmental responsibility. The survey results are summarized in the
table below (Table 1):
Also, in the survey, the respondents were asked about using of specialized
software for counterparty’s reliability assessment. One of the respondents said:
“Due to the lack of a standardized report form for non-financial statement, it is
difficult to measure environmental performance indicator, corporate social respon-
sibility performance indicator and other indicators. There are no specific information
resources for such purposes. The Internet can provide helpful data, including
information on taxes, finances, arbitration cases, inspections, etc., that can be
found at Rusprofile.ru, a data portal, developed by “Business information solutions”,
LLC. The rest of the respondents answered that they use unbiased Internet resources,
the opinions of those private or legal entities with whom they have already
interacted, as well as reports from government agencies.

Results

The market economy is characterized by random processes and phenomena that

cause unpredictable consequences, including those that have a harmful effect on the
environment. There are official data confirming that the fight in Russia to reduce the
amount of pollutant emissions into the atmosphere is being carried out at the proper
level, which shows their decrease by 14.7% during 2021 compared to 2020 (Federal
State Statistics Service, 2021). One of the reasons is the reduction in production
10 A. Rumyantseva et al.

Table 1 Survey results on the necessity to assess counterparty’s reliability

Other
Do not (it is
consider difficult to Only in
Necessary it Only Only get the certain
Studied indicators to assess necessary suppliers customers information) activities
Credit rating 82.1 3 – 13.4 1.5 –
Environmental 40.3 31.3 17.9 7.5 1.5 1.5
performance
indicators
Level of social 76.1 7.5 10.4 3 1.5 1.5
responsibility
Management 62.7 16.4 16.4 1.5 1.5 1.5
criteria
Quality of the 58.2 13.4 17.9 7.5 1.5 1.5
internal control
system
Use of information 76.1 1.5 7.5 4.5 8.9 1.5
resources
Should govern- 66.1 21.0 1.6 4.8 4.9 1.6
ment agencies
monitor the reli-
ability of
companies

volumes in general, the second reason is the introduction of new modern technolo-
gies by organizations, the conversion of production to a more environmentally
friendly form, long-term business planning, which is a hallmark for further cooper-
ation, conclusion new contracts, etc. Such a counterparty is considered as reliable
already at the preliminary stage of the study of its activities.
Most business processes and phenomena are subject to certain patterns, a detailed
study of which allows minimizing risks, generating forecasts for the activities of the
organization as a whole and its individual divisions, and developing optimal solu-
tions. To make timely management decisions, a methodology is needed to assess the
impact of external and internal factors on the results of economic activity
(Savelyeva, 2008). Among practitioners, entrepreneurs in various business areas,
there are opposing opinions regarding management, some believe that only clear
mathematical calculations and well-prepared forecasts are the basis for the effective
operation of the company, others argue that in a market economy, the organization’s
activities are unpredictable and under conditions of uncertainty intuition and a
fortunate combination of circumstances make it possible to keep the organization
afloat. Of course, clear mathematical calculations alone cannot be a guarantee of
successful entrepreneurial activity and protect against possible difficulties, since, in
addition to socio-economic relations, there are various natural influences
(a pandemic, for example), the influence of public opinion, political conditions,
military operations and others.
Basic Approaches to Counterparty’s Reliability Assessment. . . 11

When developing the financial policy of an enterprise, it is necessary to pay

special attention to such areas as the dividend rate, credit history, investment policy,
tax, depreciation, price and other components, as well as the algorithm for managing
financial risks and cash balances (Kurilov, 2014). In this regard, in our opinion, it is
extremely important for companies when planning and forming a development
strategy to pay special attention to the impact of external factors, first of all, the
reliability of counterparties. If we recall the Japanese management, when each of the
enterprises is engaged in increasing its reputation for the sake of the well-being of its
partner’s business, then we can consider the counterparty reliability assessment
scheme as a double listing system.
The financial strategy of an enterprise consists of a certain order and composition
of sections, which gives confidence not only to the management of the enterprise, its
owners, but also to its counterparties. In addition to the elements considered at the
preparatory stage, such as the results of financial analysis, forecasting the external
environment, the prospects for the development program of the enterprise and its
expected cash flow, there are also decision-making stages, the development of a
qualitative and quantitative assessment of the financial strategy, the formation of
financial reporting forecasts, taking into account the implementation of certain pro-
posals and improvement of the financial condition (Snigireva & Malykh, 2019).
Despite the fact that the time of the 90s has already passed, 1-day firms continue
to emerge despite increased control over their registration and financial transactions.
As M. Gorovtsova points out in her work “10 Ways to Check a Counterparty:
Necessary Documents and Useful Services”, “1-day” counterparties can cause
damage to both the state and the taxpayer, who will have to prove the validity of
the tax benefit received as a result of interaction with unscrupulous contractors
(Gorovtsova, 2013). Therefore, the management of the organization faces the most
important task: to prevent interaction with unreliable suppliers and buyers. In our
opinion, it is advisable to check the counterparty before concluding business con-
tracts with the help of special resources or business reputation rating. Rating
information is placed in a special register.
The unified register of the RDR business reputation rating is an electronic
re-source that reflects in real time the state of affairs of companies that have proven
themselves to be reliable executors of state and municipal contracts (Alfa Bank,
2022). You can get up-to-date information about the rating of a small company and a
large company on your own on the official website of the registry. The most
important document confirming the fact that an organization has been included in
the register is a certificate of conformity with a business reputation rating (RDR). To
improve their business reputation, organizations can obtain this certificate, which
will be a confirmation of its reliability as a bona fide counterparty. It should be noted
that a firm or an enterprise can independently take part in the formation of its rating.
In order to receive a business reputation rating certificate, they need to fulfill a
number of conditions in relation to their previous transactions, with state and
municipal companies. The RDR certificate includes information in the following
format: a report on financial results, judicial practice, balance sheet, information on
the availability of licenses, certificates and permits for SROs, information on
12 A. Rumyantseva et al.

staffing, a list of founders and affiliation, information on procurement activities and

the value of the business reputation index (Certification Center of organizations
«Altair M», https://reestr-rating.ru/?ysclid=l91st8724x55560880).
Each interested person can independently obtain information about the financial
position and financial results of enterprises on the official website of the registry. To
facilitate the examination of companies located in Russia, the assessment of com-
pliance with the standard and the issuance of business reputation rating certificates
are authorized to be carried out by accredited certification centers. This is the first
way to obtain information about the reliability of the counterparty. The second way
is to check the reliability through the 1C Enterprise platform. The third way is to
check the company through the website of the Federal Tax Service. One of these
resources is the state information resource of accounting financial statements—
https://bo.nalog.ru/about.
In accordance with the amendments made by Federal Law No. 444-FZ dated
November 28, 2018 “On Amendments to the Federal Law “On Accounting”, the
Federal Tax Service of Russia is entrusted with the functions of forming and
maintaining the state information resource of accounting (financial) statements. At
the moment, the format of non-financial indicators is not fixed in any regulatory legal
acts, therefore, in our opinion, legislators have an important task to develop them
taking into account ESG technologies.
First of all, in our opinion, it is necessary to establish at the legislative level the
possibility (for individual companies that are large or the largest—the need) to obtain
an ESG certificate or conduct an audit (verification) of statements reflecting the main
non-financial indicators. According to the list of questions developed by the State
Duma Committee on Industry and Trade, enterprises can expect to receive such ESG
certificates in the future. But first, it is necessary to develop and approve:
1. Evaluation criteria by which the categories of companies (PJSC, JSC, etc.) will be
established.
2. List (names) of forms of reporting documents disclosing ESG indicators.

Discussion

After the financial crisis of 2008–2009, information on non-financial reporting

became the focus of investors’ attention. This interest has only intensified over
time (Beerbaum, 2018). Currently, all responsible investors and shareholders adhere
to the ESG approach when checking investment projects of counterparties and
assessing the impact of firms on the environment, the specifics of the formation of
company funds and the procedure for their preservation and effective use (incre-
ment). To form an expert opinion on the degree of reliability of counterparties
operating on the basis of ESG technologies, it is necessary to study:
Basic Approaches to Counterparty’s Reliability Assessment. . . 13

1. ESG reports (all forms of non-financial reporting).

2. ESG indicators (all non-financial report indicators).
3. Evaluation/rating of the company according to ESG indicators.
When forming an ESG strategy, it is necessary to draw up such reporting that would
represent a combination of financial and non-financial indicators. The integrated
report, as Irina Bogataya points out, discloses financial and non-financial informa-
tion about the company’s value creation process and the use of six types of capital, as
well as aspects related to sustainable development (Bogataya, 2022).
The format of non-financial reporting is regulated by the Decree of the Govern-
ment of the Russian Federation dated 05.05.2017 No. 876-r “On approval of the
concept for the development of public non-financial reporting and the action plan for
its implementation” (Decree of the Government of the Russian Federation No. 876-r,
2017). The concept reflects the composition of financial statements, it is established
that the organization is given the right to independently choose its format, the
composition of indicators; ways to ensure control and evaluation of the quality of
the information provided.
An important prerequisite for creating favorable conditions for introducing
non-financial reporting into practice is the work of a quality management system,
within which non-financial reporting in the context of all forms of social responsi-
bility is established by the GOST R ISO 26000-2012 “Guidelines for social respon-
sibility” standard. As part of the research topic, I would like to highlight the task in
which non-financial reporting will be a tool to increase investment attractiveness,
since corporate reporting quality ratings take into account the availability of infor-
mation on economic, social and environmental results. The presence of an organi-
zation’s report in the ratings (for example, TOP-100 annual reports on the quality of
training) indicates public confidence in the information, and, consequently, an
improvement in business reputation (Nurova, 2019).
Table 2 shows data on the areas in which information on the reliability of
suppliers and buyers should be systematized, which should be taken into account
in order to avoid negative consequences for companies and their investors.
If such information is eventually obtained, the counterparty may be reliable. You
can derive the following dependency. So, if all 100% of the answers received
correspond to the list presented, the counterparty is reliable. If 91% (or, in two
areas of verification, other results are obtained) of the answers correspond to the list
presented, the counterparty is more reliable than not. If 83% (or other results were
obtained in four areas) of the answers correspond to the list presented, the counter-
party is less reliable. If 74% (or other results were obtained in six areas) of the
answers correspond to the list presented, the counterparty is rather unreliable than
reliable. If 65%, that is, 2/3 of the total number (or other results were obtained in
eight directions) of the answers correspond to the list presented, the counterparty is
unreliable. The results obtained may indicate that either information about the
company, financial information, non-financial reporting indicators do not meet
business standards, the degree of responsibility for its conduct is not properly
defined or not fixed by the relevant local regulatory legal act of the company.
14 A. Rumyantseva et al.

Table 2 A system of indicators for checking a counterparty in order to establish its reliability and
compliance with ESG criteria
No. Result of
p/p Name indicator Check directions checking
1. Environmental criterion (evaluates the Greenhouse gas emissions in No
company’s activities in terms of its excess of established standards
impact on the environment) Is the organization among the vio- No
lators of the environmental regime
Penalties from regulatory No
authorities
Impact on climate change No
Rational water consumption Yes
Measures to reduce harmful Yes
emissions
2. Social responsibility (established on the Are labor standards developed and Yes
basis of regulation of relations with approved by internal local acts
employees, suppliers, customers and High level of health and safety Yes
communities) performance
The management of the company Yes
has the appropriate education and
work experience
Management is a member of the Yes
founders
Relationships with clients and High
consumers level
Relationships with suppliers and High
contractors level
3 Management criterion (management of Business status check Yes
the organization, salaries of senior Prevention and Prevention of Yes
employees, audit system, internal con- Corruption
trol mechanisms and shareholder Ensuring tax transparency Yes
rights).
Ways of decision-making by the High
Board of Governors level
Signs of fictitious bankruptcy No
Signs of a fictitious business split No
4. Monitoring of law enforcement practice, Whether claims have been filed No
incl. in the field of ecology (verification against the company’s actions
of court proceedings, arbitration) Number of court cases, total, 0
including
– won 0
– lost 0
Tax disputes No
Dubious transactions No
Basic Approaches to Counterparty’s Reliability Assessment. . . 15

Conclusion

The company must develop a procedure for checking the reliability of the counter-
party and approve it as the ESG policy of the company. This regulation can be used
both for internal use when checking counterparties, and not only for internal use, but
also for tax audits, if tax inspectors check on what basis the company selects
counterparties and concludes contracts. It is necessary to familiarize all employees
of the company with the regulation. This local regulatory legal act is drawn up on the
basis of Federal legislation, taking into account the norms and rules of International
Standards.
Companies operating in compliance with the principles of ESG achieve the
highest financial performance, as investors show increased interest in them, and as
a result, there is a reduction in production costs, a stable income and a reduction in
business risk. If we recall the Japanese management, when each of the enterprises is
engaged in improving its reputation for the sake of the well-being of its partner’s
business, then we can consider the counterparty reliability assessment scheme as a
double listing system.
The formation of integrated reporting (financial and non-financial, compiled
using ESG tools) is based on consolidated thinking, which allows you to create a
continuous cycle of integration within the company (Guillot & Tilley, 2021). This is
also stated in the published document of the International Integrated Reporting
Council: the global integration of regulators, investors, companies, accounting
standards, professional and NGOs that contribute to the creation of financial profits
and other indicators are necessary elements in the effective distribution of company
capital and aligning corporate behavior with broader goals of financial stability and
sustainability through a cycle of integrated reporting and thinking (Integrated
reporting, 2017).
Currently, the most responsible investors and shareholders adhere to the ESG
approach when checking investment projects of counterparties, assessing the impact
of firms on the environment, maintaining and effectively using (incrementing) the
company’s capital. Using the system of indicators developed by the authors to check
the counterparty in order to establish its reliability and compliance with ESG criteria
at the stage of forming business partnerships, it is possible to minimize or eliminate
interaction with an unreliable counterparty, simplify the procedures for tax and other
types of audits, and increase business reputation. confusion of the company and
expand the information boundaries in the economic space.

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Corporate Management and Sustainable
Development: Case of the Fashion Industry

Sergey Yu. Solodovnikov, Tatsiana V. Serhiyevich , Vitaly A. Mordovets,

and Tatiana N. Kosheleva

Introduction

The capitalist economic system became the basis for the emergence of a consumer
society that took shape in the second half of the twentieth century (Baudrillard,
1998). One of the main factors in the economic growth of the previous century is the
growth in consumption, due to the socio-psychological stimulation of the constant
desire of individuals to renew the consumed goods. «Twentieth-century capitalism is
based on maximal consumption of the goods and services produced as well as on
routinized teamwork» (Fromm, 2008, p. 4). Indeed, in order to meet the ever-
growing needs of society, labor productivity must constantly increase, which is
fully consistent with the economic needs of the capitalist system of the twentieth
century. For a long time, there was no critical reflection in relation to economic and
environmental arbitrariness. This contributed to the formation of a mass consumer
society from the middle of the twentieth century in the United States, somewhat later
in Western Europe, and by the end of the century in many other countries of the
world. The market ideology justifies the environmental and social externalities of
economic growth with the highest value of a capitalist society namely the realization

S. Yu. Solodovnikov · T. V. Serhiyevich (✉)

Belarusian National Technical University, Minsk, Republic of Belarus
V. A. Mordovets
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
T. N. Kosheleva
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
Saint-Petersburg State University of Civil Aviation named in honor of Air Chief Marshal
A.A. Novikov, St. Petersburg, Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 17

A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_3
18 S. Yu. Solodovnikov et al.

of economic interest in the form of profit maximization or growth in capitalization of

assets (Solodovnikov, 2020, p. 22).
The source of energy for continued economic growth is the mass drive to gain
access to consumer abundance, which, however, does not arise spontaneously. On
the contrary, the system of controlled consumption is formed by socio-economic
entities with certain economic interests. The contribution to maintaining the illusions
of modern society (such as the possibility of achieving consumer abundance for all,
social equality and social mobility) is made even by those whose economic interests
are contrary to such actions. This becomes possible due to the transformation of the
economic content of the system of needs. In particular, the tools of social differen-
tiation and the construction of social statuses are used to influence the economic
motivation of individuals, mismatching the logic of forming a balanced structure of
income and expenses.
A consumerist culture is being imposed on the masses, who are trapped in a vague
ideology of economic growth. The main criterion for the effectiveness of labor
activity (in the social field measured by the category of success) is not personal
satisfaction from work, self-realization and recognition of others, but the amount of
spending possible with a certain level of income from labor activity or other income.
At the same time, the illusory nature of the ideology of the growth of personal well-
being is confirmed by the fact that the economic inequality between the rich and the
poor is not decreasing, but is growing rapidly. The formation of a consumer society
gives rise to many economic, financial, environmental, social, socio-psychological,
spiritual and other risks. And there is a conflict of interests between corporate
management and sustainable development society.
The fashion industry in the context of sustainable development is a relevant topic
of research. The emergence of the phenomenon of “fast fashion” and fast fashion
business models research is the subject of works of Barnes and Lea-Greenwood
(2006), Doeringer and Crean (2006), Bhardwaj and Fairhurst (2010), Hausman and
Thorbeck (2010), Mihm (2010), Cachon and Swinney (2011), Choi (2013) Caro and
Martinez-De-Albeniz (2015), Aggour et al. (2018), Fares et al. (2018), Cachon
(2019), Backs et al. (2021). The transition from fast fashion to sustainable and
slow fashion and responsible consumption was researched by Marques et al.
(2020), Hugo et al. (2021), Centobelli et al. (2022), Agarwal (2019), Scaturro
(2008), Xue and Huang (2022), Gardetti and Torres (2017), Ozdamar Ertekin and
Atik (2015), Henninger et al. (2016). The impact of fashion brand sustainability and
green brand strategies on consumer purchasing decisions and loyalty were studied
by Chan and Wong (2012), Kim and Hall (2015), Mandaric et al. (2022). We also
explored the relationship between the fashion industry and sustainability
(Serhiyevich, 2018). At the same time, there is a lack of research on the conflict
between the interests of corporate management in the fashion industry and sustain-
able development society. This article is devoted to the study of this contradiction
and the search for solutions to overcome it.
Corporate Management and Sustainable Development: Case of the Fashion Industry 19

Materials and Methods

The object of our study is harmonization of interests of corporate management in the

fashion industry and the society of sustainable development. The objective of this
study is to show the conflicting interests of corporate management in the fashion
industry and society of sustainable development and find solutions to overcome
it. The methodology of the authors is based on a political and economic approach,
according to which socio-economic phenomena and processes are viewed through
the prism of the economic interests of the actors involved. Research works of
international scientists-economists, data of the research reports carried out by the
authors were used to prepare this paper. We used analysis, synthesis, system and
institutional approaches in our research. This study is based on the methodology of
the great French thinker J. Baudrillard (Baudrillard, 2019) and continues and
develops the ideas embodied in the work on assessing the impact of the fashion
industry on the environment (Serhiyevich, 2018).

Results

Currently the goods exchange is becoming determined by the sign exchange, which
is based on social, limitless in its essence exchange. Modern society with more
complicated system of economic relations is especially subject to the illusion of
social mobility. The gap between real and illusory social mobility is a phenomenon
inherent in all socio-economic systems. However, in modern society, real social
mobility is becoming more and more difficult to achieve, and this gap is widening.
The function of the socio-economic phenomenon of fashion justifies the speed of
these changes (Bhardwaj & Fairhurst, 2010; Cachon & Swinney, 2011; Choi, 2013).
In such a society the function of a person from the sphere of production passes into
the sphere of consumption (the production of signs).
The essence transformations in the structure of production in the current economy
are associated with an increase in the consumption of symbolic goods. The classic
sphere of production of sign exchange values is the fashion industry, where added
value is created by managing the mechanisms of social demonstration. The rele-
vance of considering the fashion industry in the context of sustainable development
is due to the fact that the negative impact of the fashion industry on the environment
is constantly increasing. Fashion corporations are putting a lot of pressure on the
environment, which is especially true for the fast fashion segment (Scaturro, 2008;
Kim & Hall, 2015; Henniger et al., 2016; Agarwal, 2019).
The fashion industry is a system of production, distribution, appropriation and
consumption of goods with a sign exchange value, the functioning of which is
directed by the production, management, intellectual, creative and information
activities of subjects of various sectors of the economy, ensuring the constant
renewal of these goods. It is difficult to evaluate an impact of the fashion industry
20 S. Yu. Solodovnikov et al.

on the environment. For example, the clothing industry is often characterized as

ecofriendly. However, in order to estimate the development of the fashion industry
in the context of sustainable development, the impact on the environment must be
presented in a complex way, from the activities of suppliers of raw materials to the
utilization of consumer products.
The speed and efficiency of the fast fashion business model is linked to market
failure—externalities. The environmental costs of the fashion industry are borne
primarily not by fashion industry corporations, but by society as a whole. According
to the United Nations Conference on Trade and Development (UNCTAD) regarding
the negative impact of the fashion industry on the environment, today the fashion
industry is the second most polluting industry in the world, second only to the oil
industry. «Fashion accounts for up to 10% of global carbon dioxide output—more
than international flights and shipping combined <. . .> It also accounts for a fifth of
the 300 million tons of plastic produced globally each year» (Dottle & Gu, 2022).
Synthetic textiles shed tiny pieces of plastic with every wash and wear
(microplastics). «Scientists in Australia estimate that between 9.25 to 15.86 million
tons of microplastics can be found on the ocean floor» (Dottle & Gu, 2022).
Additionally, immeasurable damage to the environment is caused by the technology
of growing cotton, which uses pesticides that pollute the soil and consumes huge
amounts of water for irrigating the land.
The high differentiation of countries in terms of the institutionalization of
approaches to the maintenance of ecological rent, which meets the requirements of
the current socio-ecological and economic development, affects the structure and
distribution of world productive forces. Low environmental, social and labor stan-
dards and their incomplete compliance in certain countries attract foreign investment
in the production of textiles, footwear, clothing and accessories, which allows the
leaders of the fashion industry to make super profits through the appropriation of
natural rent without fully recovering environmental costs. As a result, there are
threats to the ecological safety of entire regions and even threats of environmental
disasters. An example is the most polluted rivers on our planet—Chitarum in
Indonesia, Buriganga in Bangladesh, Matanza in Argentina, Marilao in the Philip-
pines, Zhujiang in China and others, where chemical waste from leather, fur, textile
industries is dumped and the waters of which are used by local residents for vital
needs. This is the reason of the total destruction of ecosystems and health problems
for local communities.
Another ecologic problem connected with the fashion industry is recycling and
disposal of clothing and other goods of fashion industry. The culture of consumption
in modern society has changed—it is becoming a norm to buy clothes, wear them
several times or never wear them at all, and throw them away. «Only a fraction of
what’s manufactured gets recycled. Eighty-seven percent of the total fiber input used
for clothing is ultimately incinerated or sent to a landfill» (Dottle & Gu, 2022). At the
same time, reports show that almost all of the clothing that is thrown away with
household waste could be reused, with an estimated 95% that could be re-worn or
recycled, depending on the state of the textile waste. Instead, in countries with
developed consumer societies, the vast majority of old clothes are thrown away
Corporate Management and Sustainable Development: Case of the Fashion Industry 21

with household waste and end up in landfills or incinerators. According to expert

estimates, today, on average, a person buys 60% more items of clothing annually
than 15 years ago and throws them away about two times faster (Cobbing & Vicaire,
2017). Only a small part of used clothing is subsequently recycled or reused. Often
the disposal of textiles and clothing is carried out by incineration directly by the
corporations that produce these goods (Dottle & Gu, 2022).
The phenomenon of fast fashion was formed in the conditions of the consumer
society. An increasing number of objects, along with their pragmatic functions, are
endowed with sign functions, which often become primary, which predetermines the
choice of the modern buyer. Consumption is mediated by the intensive and constant
renewal of things (Serhiyevich, 2020) and the simulation of choice. «The consumer
society needs its objects in order to be. More precisely, it needs to destroy them. The
use of objects leads only to their dwindling disappearance. The value created is much
more intense in violent loss. This is why destruction remains the fundamental
alternative to production: consumption is merely an intermediate term between the
two» (Baudrillard, 1998, p. 47). The new source of the value for the consumer is
opportunities for intensive renewal of goods, which is a sign in itself. Such is the
socio-economic nature of the fast fashion phenomenon.
In the same time humanity in the twenty-first century throw a new look at the
goals and criteria of social development, among which social and environmental
criteria begin to play an important role, which is reflected in the concept of sustain-
able development.
A certain attempt to respond to the threats to environmental security is the
development of the concept of sustainable or responsible consumption. Consumers
supporting this concept reduce individual consumption, recycle clothes, and show a
decrease in loyalty to corporations that don’t share the values of sustainable fashion.
Against this background, many manufacturers demonstrate their commitment to
sustainable development goals by taking measures to stop burning clothes, use
recycled and environmentally friendly materials, collect used clothes for recycling,
etc. However, initiative measures without state regulation do not have a significant
impact on the size of the negative environmental impact of the industry environ-
mental fashion. However, initiative measures without state regulation don’t affect
significantly the negative environmental impact of the fashion industry on the
environment.
However, in addition to the environmental goals of sustainable development,
there are also social goals related to the eradication of poverty in all its forms
everywhere and the promotion of sustained, inclusive and sustainable economic
growth, full and productive employment and decent work for all. The measures to
overcome the existing contradiction between the consumer society and sustainable
development should be balanced and systematic. Obviously, today there is a pre-
dominant satisfaction of the interests of corporate management.
The state configures the socio-economic interests of the subjects included in the
fashion system, including the interests of corporate management, and public inter-
ests, expressing the desire for environmental security. The state is a representative of
public interests and must create conditions for the implementation of the concept of
22 S. Yu. Solodovnikov et al.

sustainable development at the national and regional levels, as well as defend these
interests in the international arena. The solution to this problem is to find the optimal
balance (compromise) between the goals of economic, social and environmental
security. One form of such compromise is the move towards circular business
models in the fashion industry. In determining the direction of the fashion industry
development, environmental threats in the context of achieving sustainable devel-
opment goals, along with economic and social risks, matter.

Discussion

Our paper throws the light on the conflict of interests of the corporate management
and society of sustainable development. The most demonstrative example is the case
of the fashion industry. This paper shows possible ways of the harmonization of
interests of corporate management in the fashion industry and of the society of
sustainable development. This paper demonstrates increasing science interest to the
environmental problems and place of the business in the creating and solving this
problem. This interest is expected to have a further growth due to the complexity of
the reconciling conflicting interests.
We began our contribution with a review of the literature review of the topics of
the phenomenon of “fast fashion” and fast fashion business models, the relationship
between the fashion industry and sustainability, trends in modern society. Than we
showed the results we obtained in our recent research of the topics of the fashion
industry and sustainability. We discussed methodological approaches and restric-
tions of our research. We showed the sign essence of current exchange, the relation-
ship of the social mobility and level on the goods consumption. We researched the
impact of the fashion industry on the environmental and showed the place of the state
in the reducing of the conflict of interest between corporate management and society
of sustainable development.
This research has some limitations. In the research of the impact of the fashion
industry on the environment, first of all we meant the production of fashion garment
and shoes. At the same time, with a broad approach, the fashion industry includes the
production of a wider range of consumer goods. Our contribution can be continued
with the research on corporate management and sustainability in other industries. Of
interest is the impact of the pandemic and subsequent decline in demand for fashion
industry products on the environmental performance of the industry.

Conclusion

Opposite tendencies are observed in current social development. On the one hand,
we see the formation of a consumer society. The development of the fashion industry
has become a factor in the intensification of the transition to a consumer society. On
Corporate Management and Sustainable Development: Case of the Fashion Industry 23

the other hand, environmental issues and sustainable development are becoming
increasingly important. The corporate interests of major players in the fashion
industry hinder the implementation of the concept of sustainable development.
The contradiction between the corporate interests of the fashion industry and the
sustainable development society cannot be resolved by purely market methods. Only
the state is able to configure the socio-economic interests of corporate management,
and public interests seeking for environmental security.

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Circular Business Models in Industry

Sergey Yu. Solodovnikov, Tatsiana V. Serhiyevich , Olga D. Ugolnikova,

and Aleksandr L. Pastukhov

Introduction

New social, economic and technological processes in the world economy have led to
the emergence of enterprises using new opportunities and demonstrating rapid
growth and efficiency. This has led to an increase in the interest of researchers in
the concept of a business model. For almost 30 years of analyzing business practices
and accumulating theoretical knowledge, the concept of a business model has turned
from a trendy term into an actual research subject and has taken a stable place in the
main terminological series of economics and management. Business model research
classics (Amit & Zott, 2001, 2015; Chesbrough & Rosenbloom, 2002; Johnson
et al., 2008; Osterwalder & Pigneur, 2010; Teece, 2010; Magretta, 2011) have
formed the theoretical basis for further study of specific forms of business models.
In previous studies, we developed the theoretical features of the business model
(Serhiyevich, 2022), studied the impact of robotization (Serhiyevich, 2020a) and
digitalization (Solodovnikov & Serhiyevich, 2022) on the transformation of business
models in industry as well as developed areas for improving the business models of
industrial enterprises (Solodovnikov & Serhiyevich, 2022).

S. Yu. Solodovnikov · T. V. Serhiyevich (✉)

Belarusian National Technical University, Minsk, Republic of Belarus
O. D. Ugolnikova
Saint-Petersburg State University of Economics, St. Petersburg, Russian Federation
A. L. Pastukhov
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
North-Western Institute of Management, Branch of the Russian Presidential Academy of
National Economy and Public Administration, St. Petersburg, Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 25

A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_4
26 S. Yu. Solodovnikov et al.

The interest of scientists in the study of the theoretical features of business models
and the demand of the business community for the results of the analysis of the
experience of building effective business models is largely due to an understanding
of the limits of technological innovations applicability and raw materials. The
important factors for the growth of companies in the industrial era were: first, a
unique technical and technological advantage; and secondly, almost limitless scaling
possibilities. Currently these factors can hardly provide an industrial enterprise with
unconditional competitiveness. The governments, the population and the corporate
top-management are faced with the fact that, firstly, the extracted resources are
depleted in the foreseeable future; and secondly, the existing methods and technol-
ogies for the extraction of raw materials cause irreparable damage to our environ-
ment. The destructive consequences will be visible not only to the generations that
will live on the planet after us, but are already visible to us. As a result, the
development of new approaches to doing business in industry becomes relevant.
These new approaches are driven by a growing awareness among corporations of the
need not only to demonstrate commitment to sustainability, but also to take real
action to incorporate elements of the circular economy into their business models.
Scientific and technological progress and changes in the way of life increase the
mobility of labor resources, capital and information with lower transaction costs. All
this enable to create new combinations of factors of production and find reserves for
the growth of economic efficiency under the influence of environmental imperatives.
The most important role in this process is played by the formation of new, circular
business models in the industry.
The interesting systematic literature review on the circular economy and new
business models topis are made by Centobelli et al. (2020), Foroozanfar et al. (2022),
Alcalde-Calonge et al. (2022). Some tools of the transition towards circular business
models in the industry were researched by Nußholz (2018), the plastic packaging
industry case was revealed by Zucchella et al. (2022), the fashion industry case—by
Dragomir and Dumitru (2022), the construction industry case—by Wuni (2022).
Uçar et al. (2020) have identified the roles of digital technologies supporting Circular
Economy. The exploring the implementation of the circular economy business
model in densely populated emerging nations on the India example is made by
Ahmed et al. (2022). There is a lack of research systematizing types of the circular
business models in industry. The study of the essence and forms of circular business
models is the purpose of this paper.

Materials and Methods

The object of our study is the circular business models in industry. The objective of
this study is the systematization of the notions and approaches to circular business
models in industry. The methodology of the authors is based on the subject-activity
approach, which enables us to show that any activity of the subject, including the
transition to one or another type of circular business model, is based on economic
Circular Business Models in Industry 27

interest. Research works of scientists-economists, data of the research reports carried

out by the authors were used to write this article. General scientific methods
(analysis, synthesis, unity of historical and logical), system approach, institutional
approach were applied during the research. The system approach enables consider-
ing the business model as a holistic, sustainable system. The institutional approach
allowed us not to ignore the transformation of forms of organization of interaction
between subjects in the process of business model transformation.
The research methodology was developed in previous studies by the authors
(Serhiyevich, 2022). It is proposed to understand the business model as a stable,
isolated, relatively independent mechanism of reproduction of use value, which
regulates the emerging economic relations and ensures the viability of the enterprise.
The business model defines unique combinations of labor, financial, material,
information, scientific and technical and other resources for the creation and appro-
priation of use value. The specificity of the use value, in turn, is embodied in the
peculiarities of the business model. The economic structure of the business model
reflects the mechanism for generating and assigning revenue to the enterprise. The
business model has a specific organizational structure that institutionalizes interac-
tions within the enterprise. The business model determines the forms of organizing
economic relations with other entities—consumers, business partners, suppliers, the
state, including the distribution of economic and social benefits between them.

Results

We define the recycling business model in the industry as a stable, isolated, relatively
independent mechanism for the reproduction of use value, which regulates the socio-
ecological and economic relations arising on this occasion, which enable to benefit
from the residual value of products and materials, to ensure the viability of the
enterprise and to allowing you to benefit from the residual value of products and
materials, ensuring the viability of the enterprise and to reduce environmental
damage. The specificity of the recycling business model in the industry is that the
enterprise derives economic benefits from the reuse or processing of products whose
life cycle is considered completed in the traditional linear economic model. The
implementation of circular economy elements for world practice and in particular for
the Republic of Belarus and the Russian Federation is not new (Fedotkina et al.,
2019; Gorbatchev & Zenchanka, 2020; Solodovnikov & Sergievich, 2020;
Zenchanka et al., 2020). However, we can talk about the transition of the circular
economy only when circular business models prevail and become not only socially
and environmentally responsible, but also cost-effective. It is important to note that
circular business models in industry today are based not only on the recycling of
waste at the end of the product life cycle, but also on the maximum extension of the
life cycle in order to reduce the amount of waste.
The world economy is characterized by multistructure (Solodovnikov et al.,
2021). Therefore, world practice demonstrates a wide variety of implementation of
28 S. Yu. Solodovnikov et al.

elements of circular business models in the industry, which have significant industry
specifics. We systematized scientific approaches to circular business models and
singled them out as circular business models (or, sometimes, recycling strategies that
allow transforming an existing traditional business model). The circular business
models are used in mining, oil refining, chemical industry, light and fashion industry
and others. These industries are, of course, vital for modern man and allow you to
meet the basic needs of the economy and the individual (Solodovnikov & Meleshko,
2022). However, the greatest damage is caused to the environment as a result of their
operation and, therefore, they are most often criticized by local communities,
environmental activists and public organizations. That is why, in the context of an
actively ongoing environmentally oriented discourse, all these industries are united
by the need to develop and implement mechanisms to increase trust and loyalty on
the part of consumers and local communities. In this regard, corporations are forced
not only to demonstrate commitment to the goals of sustainable development, but
also to take actual actions to reduce the negative impact on the environment,
gradually introducing elements of a circular economy into their business models,
in other words, moving to the circular business models.
We have identified four types of circular business models. The proposed classi-
fication is based on the criterion of the specifics of product life cycle management.
First, business models focused on the production of goods with a long life cycle.
Secondly, business models focused on extending the life cycle of manufactured
goods. Thirdly, business models focused on creating a circular life cycle of goods.
Fourthly, business models focused on eco-neutral completion of the product life
cycle. We take a closer look at each of them.
The first type of the circular business models unites companies focused on
increasing the life cycle of manufactured products. The duration of the life cycle
of products can be ensured through the use of: firstly, technical and technological
innovations that ensure the high quality of products. And secondly, society-
functional innovations based on demand management. Mechanisms for increasing
the life cycle of products, based on the use of technical and technological innova-
tions, are more characteristic of industries involved in the extraction and processing
of raw materials and the production of semi-finished products for subsequent
intermediate consumption. For example, mining, metalworking, agriculture, textile
industry. The basis for increasing the life cycle of manufactured products in this case
is the growth in the quality of manufactured products, which can be used longer.
Mechanisms for increasing the life cycle of products based on the introduction of
society-functional innovations are characteristic of the sectors of the economy that
produce final products (the production of furniture and household products, clothing
and footwear, electronic equipment for final consumption and other). The variety of
forms and scope of application of society-functional innovations, under the influence
of which consumer choice is formed, is steadily increasing. Currently it is very
important to understand the change in the specifics of competition, which is now
conducted not only by traditional methods with the help of economic and political
technologies, but also with the use of information technologies, primarily affecting
the minds of people. The consequence of the spread of their new forms is the
Circular Business Models in Industry 29

formation of certain consumer preferences of individuals and the intensification of

consumption.
The same technologies can essentially be used in reverse. To denote trends aimed
at slowing down the pace of consumption, expert and scientific discourse uses the
concept of “responsible (sustainable, rational, conscious) consumption”. Responsi-
ble consumption is a wide range of behavioral practices and principles. The purpose
of those practices and principles is the economical use of natural and other resources
in order to meet only the most necessary needs. Responsible consumption involves
actions to reduce the amount of waste by re-involving it in economic circulation or
consumption. Responsible consumption resists the destructive power of the fashion
industry, which causes great damage to the environment (Serhiyevich, 2018, 2020b;
Marques et al., 2020; Hugo et al., 2021; Centobelli et al., 2022; Dragomir &
Dumitru, 2022). Leaving aside discussions about the terminology, content and
criteria for responsible consumption, we emphasize that this concept formed the
basis of the system of sustainable fashion and slow fashion. “Sustainable fashion” is
the implementation of the principles and achievement of sustainable development
goals in various industries producing the so-called “intensive renewal goods”
(Serhiyevich, 2018), including changing approaches to both consumption and
production.
The concept of “slow fashion” covers the economic, environmental and ethical
aspects of the consumption of such goods. The supporters of this concept oppose fast
fashion and encourage consumers to abandon the purchase of goods in the mass
market segment and give preference to locally produced products and handicrafts to
support SME; support the secondary use of things (donation, resale, repair); to
reduce the level of consumption in general; give preference to high-quality, classic
goods, the production of which has not violated environmental and social impera-
tives. Risk industries are agriculture, such as the cotton or tea industry, manufactur-
ing industries (garment industry), mining and oil extraction (here, mainly the
informal economy and illegal mining).
The concepts of responsible consumption and slow fashion are influencing
traditional business models in the industry, stimulating the demand for high-quality
products produced using a labor force with safer and more comfortable working
conditions, fair wages and higher qualifications. In this regard, it is very important to
implement the principle of publicity and increase the reputational capital of indus-
trial enterprises. Society-functional technologies can serve as a tool for generating
demand for the products of socially and environmentally responsible companies,
which levels out the decline in economic efficiency and ensures an expanded
reproduction of circular business models.
The second type of circular business models unites companies focused on
extending the life cycle of manufactured goods. This group includes business models
generating income due to: firstly, the re-involvement in consumption of those goods
whose life cycle has already been completed. This approach involves the use of
products not as waste, but with the preservation of their original functional
purpose—either through direct reuse or through warranty repair, modification,
alteration. The income generation of circular business models is ensured by more
30 S. Yu. Solodovnikov et al.

intensive use of manufactured goods until they become obsolete. Today it is

especially relevant, since in the production of many goods mechanisms of acceler-
ated obsolescence are laid (for example, in the production of radio electronics or in
the automotive industry). More intensive consumption of manufactured goods is
achieved through sharing models in the sharing economy.
Business models based on service strategies and forming the main source of profit
generation are gaining ground not through the sale of goods, but through the
provision of services. For example, the revenue can be generated by subscribing
consumers for short-term leases of goods, with the option to buy back later.
Companies can use another source of profit—the provision of an additional service,
along with the rental of goods (for example, the services of a stylist for the selection
of clothes, the services of a driver for car sharing, or the services of an industrial
designer for using a 3D printer).
The transition to a circular economy has been the incentive for a renaissance of
traditional business models in the distribution industry (traditional secondhand, thrift
stores, leasing at the commercial distribution level). In addition to updating tradi-
tional business models, responsible consumption has become a driver for the
emergence of fundamentally new business models based on the commercialization
of reciprocal exchanges (Serhiyevich, 2020a). What previously acted as a gift or
exchange item in closed communities (as a rule, relatives, friends, acquaintances),
today becomes an object of purchase and sale. An increasing number of unrelated
people can participate in the sale or lease of such goods thanks to the development of
electronic commercial exchange platforms. A new source of value creation in these
business models arises from the conversion of cultural capital into economic capital.
The third type of circular business models unites enterprises focused on creating a
circular life cycle of goods by introducing recycling resources tools into production.
The study of such business models allows us to answer the question, what do the
major steel producer in Eastern Europe Byelorusian Steel Works have in common
with the Swedish fast fashion company H&M? Each of them, being an industrial
polluter, is making efforts to reduce the impact on the environment and minimize the
risks of global climate change, including through the use of recycling tools.
Byelorusian Steel Works is almost completely loaded with the processing of recy-
clable materials (waste and scrap of ferrous metals, which can be involved in
economic circulation almost an unlimited number of times), it uses thermal second-
ary energy resources in the amount of more than half of its own production of
thermal energy in order to save resources and use them more rationally
(Solodovnikov & Sergievich, 2020). But in relation to one of the world’s largest
clothing manufacturers H&M, not everything is so univocal (Fraser & van der Ven,
2022). The management of this company says that the growing movement that
condemns consumers is a real social threat. Very often, a company’s controversial
strategy is subject to justified criticism. The company, through a system of discounts
and rewards, encourages its customers to hand over unnecessary things for recycling
and at the same time make more and more new purchases. The question arises—
what are the environmentally oriented strategies of industrial corporations really—
their conscious contribution to sustainability or just an innovative marketing
Circular Business Models in Industry 31

strategy tool? The example of the H&M strategy is indicative, since the company is
one of the most criticized in terms of environmental pollution and at the same time a
leader in terms of supporting recycling production in the industry of companies, and
therefore reflects the complexity and ambiguity of the processes of formation of
circular business models in the industry.
Finally, the fourth type of recycling business models includes enterprises focused
on the production of such goods, the completion of the life cycle of which is
environmentally neutral. These enterprises invest heavily in the research and devel-
opment of innovative materials, the disposal of which does not harm the environ-
ment. The production uses either fully recyclable or biodegradable resources. Such
models have become widespread in the automotive industry, where parts at the end
of the product’s service life are removed, restored, reused; in the energy sector,
where, based on bioethanol production technologies, agricultural waste is processed
into renewable fuel; in the light industry, where the production of fabrics from
organic cotton (grown without fertilizers and pesticides), nettle, bamboo, corn and
even algae has been developed.

Discussion

The present paper is the another step towards a comprehensive research of the
business models, contributing to the development of an effective communication
among the different researchers in the circular economy area. This paper demon-
strates that new business-models is increasingly attracting the interest of both
academics and practitioners, in particular when referring to sustainable development.
This interest is expected to have a further growth due to the increasing environmental
problems.
We began our contribution with a review of the results that we obtained in our
recent research of the topics of business-models. We reviewed existing research on
the challenges of moving to circular business models. Then we discuss methodo-
logical approaches and restrictions of our research. We started with the methodo-
logical foundations of the study, presenting the definition of a business model in
general. Then we have shown how do we interpret the circular business model. We
also developed a classification criterion for circular business models and, thanks to
this, identified four types of circular business models (business models focused: on
the production of goods with a long life cycle, on extending the life cycle of
manufactured goods, on creating a circular life cycle of goods, on eco-neutral
completion of the product life cycle).
Nevertheless, this research has some limitations. Some circular business models
in practice cannot be attributed to one type or another, the distinction of different
business-model types can sometimes be conditional. Our contribution can be
supplemented by the study of trends in the transition to circular business models
in the new geo-economic realities. The relevant topic is how the current energy crisis
and the escalation of international economic sanctions will affect the speed and
32 S. Yu. Solodovnikov et al.

intensity of the transition to circular business models in the industry. So it requires a

further increase in research of the circular business models in the conditions of the
risk economy.

Conclusion

There is a transition to circular business models more and more often in the current
economic systems. In this contribution, we have identified four types of circular
business models focused on the production of goods with a long life cycle, on
extending the life cycle of manufactured goods, on creating a circular life cycle of
goods, on eco-neutral completion of the product life cycle.
Despite the existing examples of the transformation of traditional and the forma-
tion of new, recycling, business models, there is no radical change in the paradigm of
industrial development. The most obvious constraint to the development of recycling
business models is the contradiction between social and environmental efficiency
and economic efficiency at the micro level. New composite materials are being
developed that have improved properties, but are more difficult to process. Increas-
ingly, a combination of artificial and natural materials is used in production. In
addition, speaking of end products, one should not forget about their packaging,
which is becoming more and more complex (these are multilayer materials made of
paper, cardboard, various types of plastic, aluminum and other materials), it is
becoming more difficult and expensive recycle. These already traditional challenges
are complemented by new ones that arose during the pandemic, which led to a 30%
increase in the consumption of disposable goods during the pandemic (this includes
gloves, masks, individual packaging of goods).
The society expects businesses to take decisive action to reduce the negative
impact on the environment, which essentially threatens the existence of many
traditional business models. At the same time, the question of whether the recycling
strategies of industrial enterprises will become dominant or remain a marketing tool
aimed at increasing the loyalty of an environmentally responsible consumer remains
debatable. Such initiatives are likely to be peripheral in the short to medium term.
Overcoming the contradiction arising from the achievement by manufacturers of
the goals of maximizing economic efficiency and preserving reputational capital is
carried out through evolutionary (rather than revolutionary) steps to transform
business models towards sustainability and a closed economy. But the emergence
of this contradiction in itself already inspires optimism on the path of Humanity to a
circular economy.
Circular Business Models in Industry 33

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Digitalization of the Housing and Utilities
Sector as a Factor of Its Sustainable
Development

Vera Fedotova and Olga Ganina

Introduction

Modern conditions and features of the current stage of development increase the
importance of growth points that ensure the sustainability of the Russian economic
system. One of these drivers is the housing and utilities sector. The housing and
utilities sector is the most important socio-economic sphere of the Russian economy,
giving impetus to the development of related sectors and the economy as a whole.
According to the State Information System of Housing and Utilities, at the end of
the first half of 2022 there are about 1,009,566 multi-family houses in Russia that is
48 million apartments that consume utilities. Housing and utility payments are a
significant part of citizens’ expenses. Experts estimate that the market will grow at
5.3% annually in 2022–2024 due to an increase in tariffs, so even with the decline in
real income of Russians, the market will not decrease (Panteleeva, 2022). In the past
few years, economy digitalization, and in particular digitalization of housing and
utilities, has accelerated, but in general the level of digital development is very low.
The National Program “Digital Economy of the Russian Federation” defines the
main goal that is the creation of the necessary conditions for the development of the
digital economy of the Russian Federation. The digital economy is understood as an
environment “in which data in digital form is a key factor of production in all spheres
of socio-economic activity, which increases the country’s competitiveness, the
quality of life of citizens, ensures economic growth and national sovereignty”. As

V. Fedotova (✉)
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
O. Ganina
Perm National Research Polytechnic University, Perm, Russian Federation
IT-company «Digital Ombudsman for Resident», Perm, Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 35

A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_5
36 V. Fedotova and O. Ganina

part of this program, work is being done to accelerate the implementation of digital
technology in the economy and social sphere. The increased interest in the digital
economy, based on qualitatively new types of information and telecommunication
technologies, is caused by the fact that the digital economy provides an opportunity
for countries and their companies to dominate the market in key areas of socio-
economic development at present time. Residential property management services
are highly topical issue in Russia and abroad. However, it is difficult to compare
foreign and Russian experience in this area due to the peculiarities of the legislation,
and in such a case, the implementation of effective digital practices is difficult
because of the existing features of the infrastructure.
The aim of this research is to identify promising areas of digital transformation in
the housing and utilities sector to improve its sustainability.
Economic reform of the housing and utilities sector is caused not only by the need
to improve the quality of services, but also by the presence of a wide area of socio-
economic relations, which require the involvement of numerous and costly resources
of the housing and utilities sector. The Strategy of Digital Development of Con-
struction and Housing and Utilities developed by the Ministry of Construction of the
Russian Federation assumes that 375 billion rubles will be invested into the digital
infrastructure of housing and utilities until 2030. And this is primarily a moderniza-
tion of the state information system of housing and utilities, that involves the
implementation of electronic data interchange in all sectors of the economy and
the implementation of management systems based on the Internet of Things. The
problem of the new technology implementation is particularly acute for the housing
and utilities sector in the context of sanctions. Under current conditions, such digital
products and IT solutions must be the home-grown technologies. Meanwhile, the
main feature of housing digitalization is the lack of successful global practices in
creating standard, scalable effective solutions, especially when it comes to multi-
family housing. First of all, it is connected with a large number of legislative acts,
peculiarities of regional regulations that control this sector, and also, with a state of
the housing. Citizens are interested in receiving services conforming to modern
requirements, as the housing and utilities belong to the essentials. Nevertheless,
despite the range of economic activities of the housing and utilities, the main
problems are still: the excessive wear and tear of housing, engineering infrastructure
and its accident rate, chaos in the residential property management, the federal
system data on housing and utilities are not sufficiently used for decision-making
at the regional level, the growth of housing and utility payments and lack of
transparency of utility tariffs, low involvement of consumers (Speshilova et al.,
2022). The importance of the sector is determined by the fact that the housing and
utilities forms the appropriate living standards, determines the socio-economic
potential of the territories.
The main ideas of sustainable development have recently become widespread.
The issues of building information modeling and efficiency of business processes
automation current research topic. The authors presented the main directions for the
implementation of building information modeling technology for the transition to
digital exchange formats in construction. The authors also indicated the importance
Digitalization of the Housing and Utilities Sector as a Factor of. . . 37

of digitalization and the transition to information technology. In research (Boldina,

2020) marked that investment in the development of digital technology is a signif-
icant factor of the business sustainability in the times of crisis. Another author
(Chernyshov, 2003) in his research presented the classification of housing and
utilities organizations. This classification meets modern market requirements and
can be applied to create an information database that contributes to the effective
managerial decision-making. The author (Cherniak & Bogdanova, 2018) in the
research gives concept of efficiency improvement for housing and utilities were
presented of the state and progress of the development of housing and utilities sector
were presented in the research works of different author (Mordovets, 2010;
Koscheev et al., 2019; Kemaykin & Pavlenkov, 2020; Kharitonov et al. 2017a,
2017b, 2019, Krivogina et al. 2019; Safonov, 2020a, 2020b). The scientists
(Terelyansky & Zyabkin, 2020; Tarasova, 2020) justified the use of digital products
for housing and utilities as a tool to improve the quality of services in accordance
with the conceptual customer-oriented approach. In addition, the authors of this
article used their own experience in managing and developing an IT product for the
housing and utilities sector. Thus, in scientific papers, performance improvement of
housing and utilities sector and its sustainable development, primarily associated
with the digitalization. The conceptual approach to sustainable development requires
the adjustment of the legal and regulatory framework of housing and utilities sector
as well as the implementation of high information technologies into the business
processes, since it is assumed that the activities will be transformed and the com-
petitive products and services will be created in the long term, in accordance with
modern scientific and technological level.

Materials and Methods

Systems analysis of the housing and utilities sector serves as the methodological
basis for the research. Systems approach consider the sector as an open system,
including: objectives definition, organizational structure, intangible and tangible
resources, technology and other elements, taking into account the interaction
between the main market participants: government, business and citizens, that is
aimed at achieving the goals of residential property management and digital trans-
formation of housing.
The main goal of digitalization of housing is to make it more comfortable and
technologically advanced for citizens, to improve the quality of housing and utilities,
and to extend the life of capital construction facilities. The main objectives of
housing and utilities digitalization are the automation of interaction between market
participants, cost saving, house maintenance data collection and classification,
resulting in an increase of the quality of housing and utilities services and the
strategic sustainability of the sector. It should be noted that many elements of
Russia’s sustainable agenda must change and become more nationally oriented.
Our country needs its own innovative solutions, taking into account the accumulated
38 V. Fedotova and O. Ganina

Fig. 1 Model of IT Sustainability Risks Regulatory

company activity for the factors documentation
purpose of strategic Marketing Economic
Activities of IT-company in the field performance
sustainability. Source: indicators growth
of housing and utilities: digitalization
Compiled by the author of housing
based on the source Investment Competitiveness
(Grigoreva, 2017) Staffing Strategic
sustainability

economic, social and managerial experience. The modern stage of the digital
economy in the housing and utilities sector is characterized by the automation and
robotization of production processes, the emergence and development of advanced
digital technologies, such as technologies that can help solve problems in supply
chain management (SCM), enterprise resource planning (ERP) and customer rela-
tionship management (CRM) (Nureev & Karapaev, 2019). In the process of trans-
formation, the artificial intelligence development, software and IT platforms are
implemented.
In order to improve the efficiency of residential property management and
provide services of proper quality, it is necessary to consider the following factors
affecting the IT-company in the strategic sustainability management system in
housing and utilities (data are presented in Fig. 1).
Systems approach let the companies achieve goals and objectives by making
appropriate managerial decisions, that are based primarily on the analysis of factors,
conditions, circumstances that affect the housing and utilities sector, and the sector is
a part of a larger supersystem of socio-economic and political and cultural relations.
The factors presented in the figure are capable of having a positive influence on
digitalization of the sector in the long term, that will correspond to strategic
sustainability. In addition, today’s approach to strategic sustainability is based on
the need for sustainable business strategies that ensure economic performance by
taking into account the interests of all market participants.
The positive results of the housing digitalization are predetermined for all parties.
For citizens, as the main beneficiaries, the positive effects are expressed primarily
in increased quality control of housing and utilities, increased transparency of
pricing for services. The state is expected to benefit from the growth of digital
transparency in the sector, the creation of digital twins of houses, increasing citizen
satisfaction with the services provided by the housing and utilities. In addition, the
green inclusion of residents in the residential property management is encouraged.
For businesses, the positive results are primarily to reduce costs by providing
services based on objective data on the state of houses, enabling digital services
and improving the quality and accessibility of services in the financial market.
Digitalization of the Housing and Utilities Sector as a Factor of. . . 39

Results

One of the important directions of the development in the housing and utilities sector
is the creation of user-friendly digital tools for residents, combining the provision of
information and the ability to take actions that contribute to a constructive settlement
of problems and more effective interaction between the residential property man-
agement and maintenance companies and owners. The experience of digitalization
projects implementation in housing and utilities has shown the demand for such
services. Currently, it is expected that the services will perform the following
functions:
– communicative: an application for a call or a service, a feedback or a complaint,
payment for housing and utilities;
– information: information about the house, landscaping, economy, online meet-
ings and voting.
We assume that the most important is the implementation of the activity function: the
property management based on objective data (digital twins of houses and the
Internet of Things).
All market participants can be divided into the following groups:
– platforms, applications and services for business-processes automation, that is the
automation of the residential property management and maintenance companies’
activities;
– platforms, equipment, separate hardware solutions for the Smart Home System;
– platforms and equipment for data acquisition and processing by artificial intelli-
gence (industrial Internet of Things)
– public feedback platforms.
The following stages of service development can be identified (Fig. 2).
Changes in housing and utilities legislation and the emergence of a wide range of
cloud tools, services and mobile applications are developing from “traditional”
functions such as interaction between the residential property management and
maintenance company and the resident of multi-family housing (owners and tenants
of residential and non-residential premises) towards proactive management based on
objective data, that implement informational and activity functions. Achievement of
above mentioned effects is possible with the creation of a platform service with the
ability to scale to the entire housing within the subjects of the Russian Federation,
based on seamless data transmission and processing from meters, sensors and
equipment within the apartment building to the residential property management
and maintenance company and resident of the multi-family housing with access for
expert evaluation, monitoring and obtaining necessary information for state and
municipal structures, as well as supervisory authorities.
The cost of individual development of such services is quite high. Individuals,
startups, residential property management and maintenance companies, real estate
developers and major technology companies: communications service providers,
40 V. Fedotova and O. Ganina

Traditional Desirable Attractive New Generation

Basic Service Digital Service Digital Service Service

Digital management and BIM

Traditional Real-Estate Management
Property, Facility

Residential property
management and maintenance
company with fully digital
business processes

Resident advocacy service

Housing and utilities
quality inspections and
service quality
management
Control services in digital Digital housing and utilities
environment management platform
Residential property Automated management and
management and maintenance communication system, housing
companies digital services - and utility services marketplace
process of an application, bill
payment, information
disclosure, access control, etc.

Smart apartment / office / Residential

Complex
Automation, engineering system
remote control, equipment remote
control

Community – Services
Group chats,
Hobby clubs, polls

Fig. 2 Modification of the digital service development in housing and utilities sector. Source:
Compiled by the author

integraters, ecosystem participants, they all can be developers. For example, the
budget for the development of home-grown software for the management of infra-
structure real estate starts at 300,000 rubles and reaches several million rubles, which
primarily depends on the functionality required, but in such services, there is no
possibility of technical monitoring of the housing state, which is essential for the
automation. Therefore, additional costs can be avoided by offering residents stan-
dard software for monitoring the state and maintenance of houses, taking into
account the regional regulations and the specifics of the housing.
Nowadays the market offers out-of-the-box solutions with the following mone-
tization strategies:
1. for residents of multi-family housing, the payment is made through the collective
payments; the average price per square meter is around 5 rubles or 100–200
rubles per apartment per month
2. for the residential property management and maintenance company, depending
on the service functionality and the number of personal accounts, the cost can be
calculated by the number of square meters, and the average cost is between
25,000 and 150,000 rubles per month for the house.
Currently, there is an active development of the state information systems at the
expense of the state financial resources, and in this case the use of the platform for
users is free, but the functions will be limited for citizens.
It is worth mentioning a certain feature that clearly stands out in the digitalization
of the new housing market. In the market of new constructions the following models
of digitalization are formed: the first model is activated at the stage of sale of new
Digitalization of the Housing and Utilities Sector as a Factor of. . . 41

construction to the residential property management and maintenance company from

the developer, using standard services of the developer, in this case the sources of
funding of digital home systems are the developers’ funds, which are included in the
cost per square meter of housing sold without increasing the estimated construction
cost; the second model involves the cost of investment, carried out by the relevant
participants of the digitalization market, namely communications service providers,
integretors, ecosystem participants, then the costs are included in the tariffs for the
operation of these systems and additional revenue from the provision of services and
sales of goods to house residents.
At the moment the market is actively developing and saturated with platform
solution offers for the interaction between the residential property management and
maintenance companies and residents, representing the communication and infor-
mation function, although many companies are just at the beginning and are in the
process of developing individual services and functional solutions, nevertheless the
active development of software solutions for the residential property management
and maintenance companies continues.

Discussion

An important area of development is the systemic transformation of the housing and

utilities sector through the implementation of digital tools using domestic
technology.
Based on the analysis, we can identify the following trends that have a significant
impact on digitalization in the sphere of multi-family housing:
1. Changes in the consumer behavior of citizens: the consumers must be informed
and involved; with state support the citizens feedback platforms are actively
developing, including platforms for housing and utilities sector; requirements
for disclosure of information by residential property management and mainte-
nance companies to their clients—owners—are increasing. With the active and
widespread development of these technologies and the implementation of infor-
mation transparency requirements, positive changes in the provision of housing
and utilities and in the quality of life of citizens can be observed. In the world and
in Russia, the concept of “Smart City” is actively developing, citizens are placing
more and more demands on the comfort and safety of the living environment.
2. Management of multi-family housing is most often performed by a residential
property management and maintenance company authorized by the owner of the
housing to carry out activities for the purpose of proper maintenance and provi-
sion of housing and utilities. The main trend is that the number of owner-managed
companies is increasing, while the number of commercial management compa-
nies is decreasing. According to the State Information System of housing and
utilities, at the end of the first half of 2022 there are about 74,383 managing
authorities, 24,210 of which are management organizations, and the rest are
42 V. Fedotova and O. Ganina

managed by owners. Owners have become more proactive and are increasingly
moving away from residential property management and maintenance compa-
nies. There are more and more such companies, but the average number of houses
under their management is decreasing, management is organized under one or
two houses.
3. In addition, there is a trend in the development market—developers are not only
starting to manage new facilities themselves, but also to return the already
delivered housing to themselves. First of all, this is due to the fact that the first
few years the house is under warranty and the builder must deal with the
maintenance of the house, fulfill warranty requests, scheduled warranty inspec-
tions. In this case, even at the design stage of the project, all opportunities to
provide quality services to tenants are taken into account, but in this case, there is
a question of an effective control system to protect not only the interests of the
consumer, but also the provider. In addition, the complexity and technological
sophistication of capital construction facilities are increasing, new technologies
are being implemented in engineering systems, a single digital building environ-
ment is being created and, in connection with this, qualification requirements for
employees who service the facility are growing. Therefore, more and more often
the developer, who has expertise in digital solutions to be implemented at the
sites, takes care of the operation.
Under the influence of the above trends and in the context of government digitali-
zation programs, new standards for management companies appear, which leads to
the search for digital solutions, as the introduction of digital technology significantly
increases the comfort of service to residents.
Currently, it is necessary to combine the information and activity functions in the
domestic IT-product. The main task should be the development of an automated
examination of the quality of housing and utilities in multi-family housing.
The key requirements for the digital solution architecture are:
• providing a comprehensive assessment of the quality of housing and utilities
based on the collection of primary data;
• verification of compliance of multi-family housing operating processes and the
quality of provided housing and utilities in accordance with state standards;
• collection, storing, processing and analysis of data generated in the process of
providing housing, utilities and other services to residents at the apartment/house/
block level, increasing the degree of reliability and relevance of data;
• formation of a unified data environment for the housing and utilities of multi-
family housing (operation and supervision);
• provision of objective primary data of digital business analysis for proactive
management of multi-housing operating and quality of housing and utilities;
• provision of “seamless” interaction with information systems of the regional and
federal level, with information systems of subjects of the housing and utilities
ecosystem, as well as other organizations whose activities are related to or affect
the housing and utilities, through the use of unified formats and software
interfaces;
Digitalization of the Housing and Utilities Sector as a Factor of. . . 43

As a result of data collection, information about the current state of the house should
be available, and a list of the most common violations should be formed. The results
of such a service should be understandable to residents, useful to residential property
management and maintenance companies and developers, effective for public
administration.
In this case, the estimated cost of using the service should correspond to the
average market value: 100–200 rubles per apartment or 25,000–30,000 rubles per
multi-family housing, in this case the digitalization of the housing and utilities sector
is possible not only if funded by the state, but also using the resources of all
stakeholders. Thus, the use of such a comprehensive service of digitalization of
housing and utilities will help to form an effective proactive management, create a
transparent and understandable information space for all parties of interaction.
Given these prospects and the possibility of using such a service, we believe
the proposed IT solution is innovative and high in demand, as IT product is aimed at
the development of digitalization of housing and utilities and data verification of the
state of housing and utilities in multi-family housing, as well as the formation and
increment activity of property owners, combining the information and activity
functions.
At the moment it is necessary to widely apply and use a comprehensive domestic
digital solution, which includes tools for the formation of digital passports of houses
with weekly updated data; accumulation of a database of housing and utilities of the
housing; protection of residents’ interests when providing services that do not
conform to current standards; automation of work related to the inspection of
communal property. In this case, the justification of the digitalization of housing
and utilities and automation of data collection, is based on the main strategic
documents, that is the Strategy of digital development of construction and housing
and utilities and relevant regional regulations. The service may have the potential to
be used in the state housing and utilities information system development in con-
nection with such features of the product as:
– obtaining an objective and independent assessment of the state of housing and
utilities;
– objectification of expert evaluations and implementation of data automation;
– consideration and protection of residents’ interests, and delimitation of the areas
of responsibility of the parties interacting in the space of housing and utilities
(residential property management and maintenance companies, developers, ser-
vice organizations, service providers, etc.);
– fostering of the implementation of intelligent digital systems and technologies in
apartment buildings, contributing to the evolution of housing standards.
The data obtained can be used in the housing and utilities management and trans-
formation, as well as in the development and implementation of IT services and
projects in the housing and utilities sector in different regions of the Russian
Federation.
44 V. Fedotova and O. Ganina

Conclusion

Despite the scale and high importance of the digital transformation of this sector, the
development of the housing and utilities management system requires a detailed
study and implementation of new management models for economic efficiency and
strategic sustainability of the industry. Formed methods and mechanisms to ensure
effective and sustainable development of the sphere of housing and utilities in
modern conditions are based on the need to form sustainable business strategies
that provide economic performance. The key factors of sustainable development
should also include, first of all, the state support of this sector and the development of
management methods that take into account the interests of all market participants,
including their accumulated managerial, economic and financial potential. The state
is actively implementing a number of measures aimed at the digitalization of the
housing and utilities in order to provide the population with comfortable living
environment and sustainable development of the housing and utilities sector as
one of the main sectors of the economy. To implement these measures, it is
necessary to implement the most important principle of economic expediency, to
regulate the rules of interaction between market participants, taking into account the
active implementation of digital tools, to unify the requirements to the quality of
housing and utility services by means of the implementation of digital technology.
For specific IT-enterprises it is significant to manage the factors of strategic sustain-
ability, allowing to coordinate the interests of stakeholders, taking into account the
risks in the economic and social spheres. To accelerate digitalization in the housing
and utilities sector, it is necessary to reduce administrative barriers in the sphere of
utilities, promote the development of services aimed at the implementation of
automated data collection on housing and utilities and digital management. The
introduction of digital technology should be meaningful for residents and econom-
ically profitable for businesses. The introduction of automated management systems
and maintenance of the housing contributes to changes in the internal business
processes of companies, namely optimization of operational processes and improv-
ing the quality of services. The proposed example of the service functionality reflects
the model in which the actions of the executive chain of command and all market
participants, including the professional community, science and manufacturing
business are coordinated. The active position of citizens in the control of housing
and utilities and the management of their own housing should improve their quality
of life and the quality of housing and utilities. In this area, the main trend is the
development and implementation of public private partnership, that will add new
responsibilities and new digitalization opportunities for businesses and proved new
IT infrastructure services to the public. Digital platforms and services can solve
problems in the housing and utilities sector, as digitalization becomes a new
requirement for promotion of competitiveness and helps demonstrate “transparency”
and sustainability of the sector. Conclusions and practical recommendations based
on the study of national experience can find be applicable and useful for the state and
Digitalization of the Housing and Utilities Sector as a Factor of. . . 45

business, namely in the sphere of state and municipal administration, as well as for
professionals working in the field of housing and utilities.

Acknowledgements This research was founded by Digital Ombudsman for Resident, LLC.

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Sustainable Development Financing
as a Factor Affecting on Operational
Efficiency of the Company

Anna Rumyantseva and Olga Tarutko

Introduction

Modern economic conditions are characterized by the increasing influence of sus-

tainable development trends. This influence affects all spheres and the business
sector is probably exposed to it to the greater extent than other sectors. The efficiency
and effectiveness of corporate activities, financial attractiveness and raising of
external funding increasingly depend not only on following financial strategies
and achieving financial performance goals, but also on the successful implementa-
tion of non-financial performance measures.
For business, the capital adequacy matter, the importance of financial leverage
and the raising of additional financing are extremely important and often become
crucial in company’s life. There are certain financial instruments that have been
known for many decades, are time-proven and can be classified as basic. Such
financial instruments include the following: credit facilities, loans, bonds, etc.
However, the market is constantly evolving and along with that, the main financing
methods and new innovative financial instruments and products are emerging.
Company’s financial attractiveness for investors is a combination of factors,
including financial position of a company, which is an investment option, a level
of its competitiveness, the implementation of innovations and many other factors.
Over the years of financial management evolution, a large number of researchers
have been engaged in the study of investment attractiveness, factors influencing its
level, procedures for financial position analysis. Nevertheless, there are still differ-
ences in interpretations, identified features, factors of investment decision-making,
and the proposed evaluation procedure.

A. Rumyantseva (✉) · O. Tarutko

Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 47

A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_6
48 A. Rumyantseva and O. Tarutko

The analysis methodology for financial position of companies has existed in an

almost unchanged form for several decades. In Grechenyuk et al. (2015), the authors
presented an analysis of more than 20 fundamental Russian textbooks and identified
a number of common and particular problems and limitations of the methodologies,
covered in these books, such as the lack of case studies. In such conditions, the
importance of specialized literature with a high citation index increases significantly.
Thus, in Gabdullina et al. (2022) presented a financial position assessment
optimization by defining normative values of indicators, taking into account the
specifics, scale and stage of the business life cycle to ensure the objectivity of the
results obtained during the evaluation process and the efficiency of management
decisions.
It should be kept in mind that the comprehensive assessment of financial position
and investment attractiveness depends on which integral factors are taken into
account in the financial analysis. In the specialized literature there are a variety of
lists and classifications of factors. First of all, the authors divide the factors into
internal and external, as a rule, classifying them depending on the scale. Various
factors of companies’ performance are considered in the works (Nguyen & Tran,
2021; FWO Chartered Accountants, 2022; Yu et al., 2021; Lundholm, 1991; Bevan
et al., 2019).
There are also various specific factors of investment attractiveness, the variability
of which depends, for example, on the object of investment activity or country
affiliation. The authors Q. Vu, T. Hoang, T. Le (Vu et al., 2020) in their research
identified a number of such specific factors to attract investment resources in
industrial parks in Vietnam, as local advantages, infrastructure, human resources
and local institutions.
It should also not be forgotten that the behavioral factors influence the financial
decisions of investors. The research of such factors on the case of the Egyptian stock
market presented in Metawa et al. (2018) demonstrated that the level of education,
age and gender of an investor can have a significant impact on investment decision-
making, but experience, on the contrary, does not matter significantly when making
a decision.
A review of the economic literature showed that, despite the lack of a unified
approach to the composition of investment attractiveness factors, all the authors, one
way or another, allocate a group of financial and economic factors as one of the most
significant, which leads to a more detailed research of the effectiveness of business
processes.
Boichenko K.S., Klymenko S.M., Terentieva O.V. and Kuznetsova N.B. in their
research (Boichenko et al., 2020) formulated an approach to assessing and improv-
ing the efficiency of the integrated development of light industry enterprises, includ-
ing modular diagnostics of enterprise activities. This approach involves summation
of products of the four modules (innovative, informational, organizational and
economic) by weighting coefficients. The proposed methodology is quite interest-
ing, but that research does not explain the basis of which indicators the calculation of
the above modules is carried out.
Sustainable Development Financing as a Factor Affecting on. . . 49

Vinnikova I.S. and Kuznetsova E.A. researched integrated assessment of finan-

cial position. In the paper Vinnikova and Kuznetsova (2016) they suggested an
integral index for assessment of industrial companies’ financial condition that is
calculated as the sum of products of the factors selected by the weight of their expert
estimate. I.S. Vinnikova and E.A. Kuznetsova suggested that private factors include
cash ratio, quick ratio, equity to current asset ratio, equity ratio, solvency ratio,
Altman Z-Score and product profitability.
In Abdul-Azalova (2021), the author presented a diagrammatic model for a
comprehensive assessment of business processes based on a selected set of data,
and in Wanchai (2019) the author investigated the impact of implementing enterprise
resource planning systems, as a factor of comprehensive efficiency, on its level in the
long term. The aim of our research is to justify the need for financing innovative
potential and sustainable development from the perspective of ensuring the effi-
ciency of economic activity.

Materials and Methods

The widespread use of innovations, both financial and technological, has a tremen-
dous impact on all spheres, transforming the usual perception and existing processes
from the perspective of changing the sets of factors that influence them. Determining
the importance of sustainable development and the content of non-financial factors
determines the need to take them into account when assessing the companies’
financial attractiveness.
In this paper, the authors analyzed specialized literature with a high citation index
devoted to the topic stated in the title. The research is based on dialectical system
approach, as well as logical analysis, the use of general scientific methods and the
use of methods of retrospective analysis. The authors used analytical materials and
data from investment platform portals.

Results

Problems in the field of climate change, the level of environmental pollution, the
exhaustibility of natural resources, overpopulation, poverty, hunger, the importance
of responsible consumption—all these are challenges for all mankind. Environmen-
tal and social problems are developing quite dynamically, and their aggravation
causes the interest of countries in ESG-principles that allow to take into account the
impact of companies’ activities on the environment, the climate and society
(Potapova & Kargina, 2022). The interest of the scientific community in the study
of financing for sustainable development in recent years has revealed a large number
of controversial issues.
50 A. Rumyantseva and O. Tarutko

As is well known, the achievement of the Sustainable Development Goals is

aimed at eradicating poverty, conserving existing resources and ensuring well-being
for all. Practically applying the economic model of corporate sustainability, SDGs
can strengthen economic incentives to spend resources more efficiently or pursue
safer alternatives. The entrepreneurial sector cannot thrive in a depressed society and
the investment flow, aimed at achieving the SDGs, supports the fundamentals of a
successful business, including: a transparent financial system, regulated markets, and
non-corrupt and governable institutions (SDG Compass, 2015).
The process of ensuring investment attractiveness and maintaining an acceptable
financial position is a set of actions aimed at the establishment, formation, mainte-
nance and prevention of decline in a target level of integral factors at all stages of
business entity life cycle. The performance efficiency of a company depends on a
large number of factors, a number of which act as integral. Financial position of a
company is a complex financial performance indicator. Calculation of the integral
indicator of financial position requires a fairly voluminous and cumbersome arith-
metic, as well as access to a large amount of information. That is why the authors
proposed to use the operational efficiency indicator in order to measure the integral
indicator that characterizes the efficiency of economic activity. The operational
efficiency indicator is the ratio of companies’ revenues from the sale of goods,
works, services of the studied company to the costs of producing and selling goods,
works, services (Voronov, 2015, p.27).
The efficiency of economic activity can be identified as a complex indicator of
success and, along with indicators of operational efficiency and strategic positioning,
should take into account the influence of non-financial factors on financial success.
According to the authors, the key non-financial factors should include factors of
innovative potential and sustainable development of the company.
Another indicator of great interest is a composite indicator of sustainable devel-
opment of the industrial enterprise, that is measured as a geometric mean of
economic, environmental, social and risk sustainability, proposed in
Khomyachenkova (2010). A procedure for calculating the integral indicator of
innovative potential, which includes intellectual property security coefficient, inno-
vative products share index and innovative growth coefficient, is presented in Kunin
et al. (2018).
The aforementioned determines the increase in the efficiency of economic activity
and financial attractiveness with an increase in indicators of sustainable development
and innovation potential. And increased financial attractiveness, in turn, can have a
positive impact on the ability of companies to raise additional financing. In other
words, these indicators are interdependent and have mutual influence.
A promising solution that is gaining popularity in the Russian Federation is the
use of investment platforms. According to Central Bank of the Russian Federation
(2022), the growth rate of the crowdfunding market in 2021 was higher than in the
previous year, that is demonstrated by an almost twofold increase in the volume of
funds raised (from 7 billion to 13.8 billion rubles), and that was achieved by
borrowers’ inflow from small and medium-sized businesses.
Sustainable Development Financing as a Factor Affecting on. . . 51

The increase in interest in investment platforms was demonstrated by represen-

tatives of small and medium-sized businesses and in the first quarter of 2022, the
amount of funds raised by them amounted to 68.7% of the total amount of funds.
This dynamics of interest in attracting investment using investment platforms is due,
among other things, to the fact that the Ministry of Economic Development of the
Russian Federation has launched a program to reimburse part of the costs of small
and medium-sized businesses to provide access to platforms for collective invest-
ment by providing subsidies to operators of the investment platform.
Despite a lot of positive aspects of fund raising by using financial innovations in
the form of investment platforms, expanding the amount of capital of the company,
there is also a significant possibility of negative consequences from making such
decisions. This probability may be due, first of all, to the increasing risks associated
with the lack of financial position assessment and, consequently, capabilities assess-
ment. In the research Rumyantseva and Tarutko (2022a, 2022b), it is presented that
before concluding an agreement with a potential participant, an investment platform
operator must identify such participant in accordance with the Russian Federation
legislation requirements on countering the legalization of illicit gains (money laun-
dering) and terrorism financing, and also must receive a confirmation from the
investor that he is aware of possible risks related to investment activities via
investment platform. After the check out, the operator enters into an agreement
with the participant of the investment platform.
The requirements for persons attracting investments using investment platforms
specified in the Federal Law of 02.08.2019 N 259-FZ “On attracting investments
using investment platforms and on amendments to certain legislative acts of the
Russian Federation” note that they must not undergo bankruptcy proceedings, have
outstanding convictions or disqualifications. Also, this legislative act specifies the
possibility for clarification, since the borrower must also meet the requirements
established by the rules of the investment platform. Among the requirements for
borrowers in (LLC “National Investment Platform”, 2021) the only significant
factor, from the perspective of financial performance, is the absence of losses of
the company in the last accounting period, which in some way mitigate the risks of
the investment platform, but not the risks of the borrowing company. And in the case
of (JSC “DRAGA”, 2021; JSC “Reestr”, 2022; Investment platform LLC “Registrar
“Garant”, 2021; Investment platform “My Capital”, 2021) there are no such
restrictions.
Thus, a company that attracts investments using investment platforms should be
aware of the fact that they are unprotected from the risks due to the requirements of
the investment platform, which is determined by the desire to attract to the platform
as many companies as possible, and the degree of responsibility for making invest-
ment decisions when placing investment proposals on the platform.
A comprehensive assessment of the efficiency of economic activity should be
carried out in order to prevent risk realization that are borne by both an investor and a
company attracting investments, but not by the investment platform.
Among the results obtained in the research are:
52 A. Rumyantseva and O. Tarutko

– an analysis of the requirements for borrowers imposed by various investment

platforms was carried out and the conclusion was made that there are no restric-
tions on them from the perspective of the effectiveness of companies’ financial
activities in these requirements;
– to ensure a comprehensiveness assessment it is proposed to use a set of integral
factors of companies’ effectiveness, including the definition of operational effi-
ciency, strategic positioning, innovation potential, as well as a composite index of
sustainable development;
– the need to assess the effectiveness of company’s economic activities, which
attracts investment using investment platforms in order to eliminate the exposure
to risks that is not limited by the requirements of the investment platform, is
justified.

Discussion

Currently, taking into account the adjustments made to the system of global SDG
indicators after their approval in 2017, their number is 231 SDG indicators (Sus-
tainable Development Goals in the Russian Federation, 2022, p.3). As noted in
(Sustainable Development Goals in the Russian Federation, 2022, p.40), in the
Russian Federation special attention is paid to employment and support for small
and medium-sized businesses, including within the framework of national projects.
This policy allows to demonstrate positive dynamics among various indicators, for
example, at the end of 2021 the labor productivity index increased by more than 10%
compared to 2015. The unemployment rate decreased by 2.5% over 12 years, while
showing a steady downward trend (except for 2020, the unemployment rate was
affected by the Covid-19 pandemic) [ibid, p.41].
The number of advanced manufacturing technologies developed, that are new to
the Russian Federation, has grown by more than 150% over the past decade, and the
number of socially important infrastructure facilities with Internet access has
increased by 35.7% in the past year. The number of small and medium-sized
companies with debts to credit institutions has decreased by almost 1% over the year.
We would also like to focus on the need to transition to sustainable consumption
and production, because indicators in this area have a special place among the SDGs
for a number of reasons, namely:
– the business sector practically occupies the entire market, with the exception of
some government and social spheres;
– companies following the path of the SDGs are able to immerse their staff in the
ideas of sustainable consumption, motivate them to follow those ideas, popularize
it and, as a result, increase the values of sustainable consumption indicators
within households.
In fact, responsible consumption and production in conditions of increasing demand
and population growth are the key factors in increasing economic competitiveness.
Sustainable Development Financing as a Factor Affecting on. . . 53

The number of ecological and educational facilities in nature reserves and

national parks, aimed at popularizing the SDGs, has grown by a third over the
decade [ibid., p.64]. However, by the end of 2021, the amount of disposed and
neutralized production and consumption waste shows a negative trend—a decrease
of almost 6% compared to this indicator in 2017. The number of companies
voluntarily posting non-financial reporting in open sources has increased by 74%
since 2010 and reached 101 units.
The role of technology in the field of ecology, aimed at protecting the environ-
ment and conserving resources, is to promote long-term economic prosperity and
growth.
According to the “Requirements for Verification of Sustainable (Including Green)
Development Projects in the Russian Federation,” approved by Russian Government
Resolution No. 1587 dated September 21, 2021, financial instruments of sustainable
development include green financial instruments aimed at financing explicitly green
projects in terms of international taxonomies, and adaptation financial instruments
aimed at financing projects outside the first group, but corresponding with Russia’s
national priorities in the field of ecology and climate change (Potapova & Kargina,
2022). However, the analysis [ibid] of the international market has shown that in
practice such instruments include many more, such as COVID-19 bonds; sustainable
bonds; green credits and others. It is the absence of a formalized approach to
determining whether financial instruments belong to the SDGs that complicates
the analysis of the market for such instruments.
In the formation and development of the enterprise, the satisfaction of the needs
of the state, participants, employees, the most important role is given to the capital of
the enterprise. The development of measures to improve the efficiency of the capital
is listed among the primary tasks of financial management. Attracting additional
financing aimed at the development of integral non-financial factors, in any case, is
fraught with risks. Many authors note that most of the “green technologies” today are
economically less profitable, and investments in them are riskier than in traditional
“brown” technologies (Bigerna et al., 2019; Taghizadeh-Hesary & Yoshino, 2019).

Conclusion

The main constraint on the entrepreneurial sector’s pursuit of sustainable develop-

ment is the lack of standardized forms and an elaborate regulatory framework for the
preparation and provision of non-financial reporting. Along with the lack of stan-
dards for providing information, the barriers to the dynamic ESG-transformation of
the corporate sector include an insufficient degree of transparency of non-financial
information, the subjectivity of assigned ratings, the low level of competence of
Russian entrepreneurs in the field of ESG.
Ensuring transparency and comparability of information can be achieved by
developing standards for the provision of non-financial information on sustainable
development and ESG indicators. Such initiatives exist in the global practice, among
54 A. Rumyantseva and O. Tarutko

them we can single out the following: European Union Directive on the disclosure of
non-financial and diversity information, Global Reporting Initiative, Sustainability
Accounting Standards Board and a number of others. There are cases when a
business voluntarily compiles reports in accordance with several standards. In
other words, the market has formed a request for the creation of a single unified
system of standards (Rumyantseva & Tarutko, 2022a, 2022b).
The untimely reaction of a business entity to changes in the external environment
can cause serious damage to its financial position. As stated in (Rumyantseva et al.,
2020), company’s management should improve the corporate financial control in the
direction of increasing flexibility and reducing the inertia of response to control
actions, which can be facilitated not only by maintaining financial performance at an
acceptable level, but also by phased investment in the development of non-financial
integral factors.
The development of innovative potential and following the path of sustainable
development can create additional competitive advantages of business entities and
consider future competitive opportunities associated with the level of innovativeness
of the enterprise. The ability to successfully compete in the future with companies
that actively implement innovations and SDCs in their activities, achieved through
the development of the above-mentioned integral factors, determines the need to
finance the development of innovative capacity and sustainable development of
companies.
Further research should focus on overcoming one of the primary problems
limiting the development of sustainable development principles, namely the devel-
opment of unified standards for the provision of non-financial reporting, as well as
the adjustment of the generalized indicator of sustainable development of industrial
enterprise to better adapt its application in the sphere of small and medium
enterprises.

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Features of Financing the Green-Digital
Way in Russia

Elena Vitsko, Elena Sintsova , and Mikhail Makarov

Introduction

In Russia the transition to a green economy in connection with integration and

globalization into the global digital economic system, as well as in accordance
with the goals of sustainable economic development is simply inevitable (Novoselov
et al., 2022; Orlov et al., 2021). In addition, according to the draft strategy for
low-carbon development of Russia, a significant reduction in emissions should be
achieved by 2050—by 79% from the current level and by 89% from the level of the
1990s; and by 2060 the country should achieve carbon neutrality.
At the same time, the transformation from the “traditional” one is complicated by
a number of reasons, and the main one is financing of the oil and gas industries
transformation and, accordingly, the loss of part of the income of Russian producers
of these resources as the world’s largest suppliers of hydrocarbons. According to the
Economic Expert Group, last year changes in oil and gas revenues amounted to more
than 70% in nominal terms and about 60% in real terms in “Federal budget revenues
by main types of inflows”. Therefore, in modern realities, complicated by the socio-
political and global financial crisis, it will be extremely necessary to preserve the
“traditional” way for some time and transit fairly smooth to green-digital technolo-
gies aimed at diversifying business processes and developing new indigenous
industries, for example, hydrogen, steam reforming and petrochemicals, with a
reduced carbon component of the baseline, as well as gas projects with a low carbon
intensity. In addition, Russian industry should be focused not just on the production
of hydrocarbon raw materials, but on the creation of material resources and finished

E. Vitsko · E. Sintsova (✉) · M. Makarov

Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 57

A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_7
58 E. Vitsko et al.

products with a wide range of processing industries (Antonizzi & Smuts, 2020;
Makarov et al., 2020).
Therefore, the introduction and development of the green-digital way in Russian
economy seems to be a very relevant topic for research, and the assessment of the
influence of factors for expanding the practice of its application is timely and
necessary.

Materials and Methods

The study uses an integrated approach to assessment of the green-digital way

development and its financing in Russia. The authors use general scientific methods
of cognition: analysis, synthesis of theoretical material and experimental data,
detailing, systematization, classification, grouping, comparative analysis; economic
and statistical methods, as well as the laws and principles of formal logic. The studies
and recommendations were carried out on the basis of statistical data from Rosstat,
the Ministry of Construction of Russia, the Regional Public Center for Internet
Technologies, SKOLKOVO Moscow School of Management, etc.
The econometric modeling tools that are used to assess the relationship between
the Cities’ IQ Digitalization Index and environmental expenditures are the method-
ological basis to identify the characteristics and features of expanding the practice of
the green-digital way.

Results

The green economy within the framework of sustainable development has ac-quired
not a terminological connotation, but a paradigm of the global economy develop-
ment, where the main emphasis is on renewable natural resources and their smart
use. In Russia, during the transition to a sustainable development model, special
attention is paid to the introduction and development of a national model of a green
economy, taking into account digital technologies. Thus, the digital and green
economies should form a single “green-digital way”.
Russian and international companies Gazprom Neft, Lukoil and NOVATEK, BP
and Shell are examples of companies transformed into integrated energy ones, which
seek to completely switch over or significantly reduce the use of oil and gas
components in the technological process. In addition, such companies use BigData
that allow automatic processing of large volumes of data, analyze and predict
bottlenecks, create digital deposits, etc. (Chanias et al., 2019; Matt et al., 2015).
In addition, Russia has the world’s first DAOIPCI blockchain ecosystem, where
the main asset is a purchased carbon unit. The main goal of the ecosystem is to attract
financial resources to innovative environmental projects and store information about
their results, taking into account the use of the best available technologies. Alike
Features of Financing the Green-Digital Way in Russia 59

system can be used to attract debt financing, for example, green bonds “placement”,
environmental safety improvement, etc.
Besides the main elements, financial institutions are also actively integrating into
the green-digital way: at the ESG-(P)Evolution congress held in Moscow on October
14, 2021, it was stated that “green-digital” projects, for example, stations, built on
renewable energy sources, receive financing on preferential terms. Corporate
“green” banking in Russia has an “active” trend that is evidenced by the fact that
in the first half of 2021 Russian financial institutions issued ESG loans for 400 billion
rubles.
In addition, the UNEP FI Principles of Responsible Banking operates in Russia.
Sberbank, Gazprombank, Moscow Credit Bank, Home Credit Bank, Sovcombank,
Tinkoff Group, Center-Invest Bank are guided by the principles of this program,
built on “responsible financing” and “responsible banking”.
In Russia less than 10 local banks have joined the UNEP FI Principles of
Responsible Banking—mainly large federal and regional financial and credit orga-
nizations. Globally, the program includes almost 450 members of the “financial
community”—more than 220 banks, insurance companies and investors, designed to
mobilize private sector finance to solve global environmental problems. Thus, it is
possible to conclude that it is necessary to gradually introduce ESG principles into
the work of companies, both at the financial and industrial economic levels, espe-
cially for the energy industries.
Although the results of the ESG Banking in Russia study conducted by the
Association of Banks in 2021 showed that 80% of enterprises in the real sector of
the economy do not consider introducing such practices in their activities in the near
future. As for the financial sector, there has been a relevance of support from the state
and the Bank of Russia to promote ESG banking. According to Expert JSC, 57% of
financial and credit institutions consider the most necessary measures of state
support to be the benefits for reservations and the reduction of risk weights for
ESG loans, 30%—the availability of state subsidies for lending to such projects; in
addition, tax incentives are mentioned, etc.
Assessing the work of in-country banking, it is possible to point out that in local
financial institutions there is a clear trend towards the introduction of electronic
paperflow—it is typical for Sberbank PJSC, Moscow Credit Bank, Home Credit
Bank, etc. As for the latter, the annual economic effect from such a transition is more
than 1 million sheets of paper saved. At the same time, the analysis of the docu-
mentation is carried out by the Electronic Office, and the intra-bank client payment
transactions are processed by the robot. With this kind of implementation, there was
an acceleration of settlement and payment transactions and a reduction in paper
carriers of the corresponding transaction registers.
In addition, Russian banks use not only “green-digital” settlement and payment
transactions, but also settlement and payment means. For example, back in 2018, the
same Home Credit Bank issued a “Green Benefit” card made of biodegradable
plastic. Using this card its holders receive an increased cashback if they buy
“green” products.
60 E. Vitsko et al.

In Russia as a whole over the past year, approximately 30% of the turnover of
debit cards and more than 20% of the turnover of credit cards were tokenized,
i.e. their application is carried out without their physical presentation. According
to the Central Bank forecasts, in the near future more than half of the cards will be
digital ones. In the current situation, of course, the basis is the digital development of
the local ecosystem, but an important role is played by internal and external social
risks that affected the macro-, meso- and micro-levels of functioning and develop-
ment of the economy in the healthcare sector (Sintsova & Vitsko, 2020; Zhang et al.,
2016).

Discussion

According to Rosstat and British Petroleum, in 2021 China, the USA, India, Russia
and Japan are among the top five in electricity generation, dominated by oil, gas and
coal, and this position has been maintained for several years in a row (see Fig. 1).
Therefore, the gradual transition and development of the “green-digital” way will
require significant additional funding and the transformation of the existing “tradi-
tional” way. As it was mentioned above, the green-digital way development is
impossible without a financial component, so it is extremely necessary to analyze
the relationship and interaction of environmental spending and the main elements of
the green-digital economy in the analysis of this issue (Litvinov et al., 2019; Levina
et al., 2015).
Considering factors—indices for combining digitalization, greening and financial
costs, the authors came to the conclusion that the Cities’ IQ Digitalization Index will
be the most comprehensive. The Index is calculated for 203 Russian cities partici-
pating in the Smart City project and includes 10 areas of sub-indices, namely,
innovations for the urban environment, intelligent systems for public and environ-
mental safety, intelligent systems for social services, etc. with an assessment of
47 indicators. Thus, this Index includes digital and environmental components.
Of course, it is possible to consider the Business Digitalization Index that
characterizes the speed of business entities adaptation to digital transformation. It
includes Information security as four private index, but environmental security is not
included in this Index, although this Index is more in line with the green-digital way.
In addition to this Index, the authors also consider the Digital Russia index

Fig. 1 World leaders in

China - 29.0%
electricity generation,
(dominated by oil, gas and USA - 16.0%
coal, %) India - 5.8 %
Russia - 4.0%
Japan - 3.7%
Other contries - 41.5%
Features of Financing the Green-Digital Way in Russia 61

Table 1 Dynamics of the Business Digitalization Index and Digital Literacy Index of Citizens of
the Russian Federation
Year 2015 2016 2017 2018 2019 2020 2021
Business Digitalization Index, % – – 28 31 45 50 51
Digital Literacy Index, points 4.79 5.42 5.99 5.41 7.15 7.25 6.9
Source: According to SKOLKOVO Moscow School of Management and RPCIT

Business Digitalization Index

70
Business Digitazation Index, %

60
50
40
30 Line 1
y = 0.5x2 + 5.5x + 21
20 Polinomial (Line1)
R² = 0.9413
10
0
0 2 4 6
Year

Fig. 2 Dynamics of the Business Digitalization Index and forecast values in 2021

developed with the participation of SKOLKOVO Moscow School of Management,

calculated for 85 constituent entities of the Russian Federation, taking into account
seven sub-indices within the additive model, including, by analogy with the previous
five sub-index, Information security, but not the environmental one.
Analyzing one of the most generalizing indices—the Digital Literacy Index of
Citizens of the Russian Federation, developed by the Regional Public Center for
Internet Technologies (RPCIT), that is a three-component model formed on the basis
of 20 key indicators, it is possible to come to the same conclusion as considering the
previous Index. The sub-index of digital consumption, the sub-index of digital
competencies and the sub-index of digital security as factors do not provide for the
inclusion of an environmental safety indicator. At the same time, this Index con-
siders the general level of society digitalization.
According to the dynamics of the Business Digitalization Index and Digital
Literacy Index of Citizens of the Russian Federation, given in Table 1, it is possible
to make the corresponding graphic illustrations.
An analysis of graphic illustrations of the dynamics of the Business Digitalization
Index and Digital Literacy Index of Citizens of the Russian Federation (see Figs. 2
and 3) showed that the coefficient of determination in both Indices has the highest
value according to the polynomial trend. As for the forecast value obtained
according to the formed trend, it amounted to just over 60% for the Business
Digitalization Index and 8 points for the Digital Literacy Index of Citizens of the
62 E. Vitsko et al.

Digital Literacy Index of Citizens of the Russian Federation

9

Digital Literacy Index of Citizens

of the Russian Federation, points
8
7
6
5
Line
4 y = 0.0363x2 + 0.2294x + 4.649
3 R² = 0.8213
2 Polinomial
1 (Line1)
0
0 2 4 6 8
Year

Fig. 3 Dynamics of the Digital Literacy Index of Citizens of the Russian Federation and forecast
values in 2021

Russian Federation. At the same time, in 2021, according to the results of a study
with the participation of SKOLKOVO Moscow School of Management and others,
the actual value of the Business Digitalization Index was 51%; and according to the
Regional Public Center for Internet Technologies, the value of the Digital Literacy
Index was fixed at 6.9 points. The decline in both Indices occurred including due to
reducing the digital security sub-index, with the only difference being that in the first
case it applies to the population, and in the second case to the companies that do not
use any means of information protection, the share of which increased by 11% over
the year and amounted to about 28% and those business entities that do not have an
approved information security policy—their share has increased from 60% to 67%.
At the same time, it should be pointed out that active steps are being taken in
Russia to create infrastructure and increase the digital literacy of the population,
from the implemented training programs to the development of functional
structures—financial and credit, housing and utility, etc. (Dai et al., 2015; Perelet,
2019), and this, in turn, should lead to the transformation of their consumption,
especially in the housing and utility sector when handling solid household waste.
Thus, developing business digitalization coefficients, the authors consider it
necessary to take into account the presence of an environmental indicator within
regional clusters, for example, as part of the safety factor formation.
Further research of the authors concerns making the connection between the
Cities’ IQ Digitalization Index and environmental spending. Table 2 presents data
that can be used to make connection alike.
The non-linear regression model of the parabolic function, obtained on the basis
of the data in the table using the least squares method, is a polynomial of the second
degree (because the values of the determination coefficients are slightly lower in the
linear, logarithmic, exponential and degree trends than in the considered one). It has
the following form: ŷ = 1.62 × 2-100.4x + 2264, the coefficient of determination
Features of Financing the Green-Digital Way in Russia 63

Table 2 Data to make the connection between Cities’ IQ Digitalization Index and environmental
spending
Year Cities’ IQ Digitalization Index, points Environmental spending, RUB bn
2018 33.12 720.91
2019 40.73 871.99
2020 44.17 996.14
2021 46.12 1091.53
Source: According to Rosstat and the Ministry of Construction of Russia

(R2) is over 0.9, and the calculated value of Fisher’s F-criterion of 499.5 is more than
the critical one of 199.5 (when α = 0.05), which indicates the significance of the
factors included into the model. Even in view of the small sample, the Cities’ IQ
Digitalization Index has been calculated since 2018, the average approximation error
was less than 1%, namely 0.89%, which means that the constructed regression
equation is highly adequate.
In addition, evaluating the development by the coefficient a2 = 1.62
(ŷ = a0 + a1x + a2x2), it is possible to indicate that there is an acceleration in the
development of the studied processes.
Thus, the impact of information and communication technologies on greening,
taking into account the corresponding costs for environmental protection, will only
increase as these resources penetrate, but at the same time, the Cities’ IQ Digitali-
zation Index under consideration is aimed at developing urban infrastructure, and not
industry as a whole.
The analysis showed that Center for Scientific and Technical Information of
Lomonosov Moscow State University is developing the National Index for the
Digital Economy Development (the index of the same name was developed by
Rosatom State Corporation and was included in the Digital Economy National
Project). The developers of the “new” Index indicate that, in addition to the regional
digital transformation, it also takes into account the financial component: the public
and banking sectors. The authors believe that in its formation it is extremely
necessary to take into account the ecological transformation, in the light of
technogenic and natural-climatic factors.
As it has been already seen in Russia, spending on environmental protection had a
certain tendency to increase. According to the “Strategy for the Digital Transforma-
tion of the Ecology and Nature Management Industry”, resource provision within the
framework of the federal budget and extra-budgetary funds increased by 6338.5
billion rubles in 2022. At the same time, in 2023, compared to the previous period,
funding will be reduced by 16.7%, and in 2024, also compared to the previous year,
funding will decrease by two times.
In addition, the problem of waste management is currently acute (Girard &
Gravagnuolo, 2017; Ozili, 2021; Tagaeva & Kazantseva, 2021; Saarinen &
Aarikka-Stenroos, 2022). The State Environmental Protection Program is function-
ing in Russia, in the context of which the Ecology Project is being implemented. It
aimed at efficient waste management, elimination of unauthorized dumps in cities
64 E. Vitsko et al.

and reduction of air and water pollution, organization of specially protected natural
areas, etc. National Project covers a number of areas, such as: Waste, Water, Air,
Biodiversity and Technologies. The Project finances investments in the construction
of processing facilities, but it also tends to be reduced; last year, compared to the
previous one, funding decreased by 12 billion rubles, this year it is planned to reduce
it by 17 billion rubles compared to the previous year. Therefore, the authors come to
the conclusion that the presence of private investment capital and the creation of a
favorable environment for its functioning in the current situation is extremely
necessary.
Considering such engagement for specific economic entities, for example, for
Citymatic-Yugra LLC and Commercial Real Estate JSC of Garant-Invest Financial
and Industrial Corporation—issuance of “green” bonds, as well as for Russian
Railways—issuance of “green Eurobonds”, corresponding to the principles of
green bonds (GBP) of the International Capital Markets Association (ICMA), the
authors register a certain trend in the presence of “specific” players in the market, for
whom the principles of ecology and social responsibility are quite relevant. At the
same time, a slight increase in the number of these “players” can also be registered,
as at the end of August last year, 103 Eurobonds were traded on the Moscow
Exchange, 86 of them were corporate and 17 sovereign ones; at the end of 2020
there were 70 securities alike, 54 of them were corporate and 16 sovereign ones.
As mentioned above, green-digital projects require certain costs and often do not
guarantee high returns, so investors are wary of such securities. All of the above
indicates that the state needs to stimulate the activity of business entities, as well as to
form the “transparency” of the environment for their functioning. Decree of the
Government of the Russian Federation dated April 30, 2019 No. 541 “On Approval
of the Rules for Providing Subsidies from the Federal Budget to Russian Organiza-
tions to Reimburse the Costs of Paying Coupon Yield on Bonds Issued as Part of the
Implementation of Investment Projects for the Implementation of the Best Available
Technologies” confirms the expansion of the practice of using “green” debt instru-
ments in the economy.
Certain steps for the development of the financial market infrastructure are also
being taken by its institutional entities. Thus, the Moscow Exchange and the Russian
Union of Industrialists and Entrepreneurs have developed the following Indices:
Responsibility and Openness and Vector of Sustainable Development that are
interconnected. The calculation base for the latter includes shares of companies
that demonstrate the best dynamics of indicators in the field of sustainable develop-
ment and corporate social responsibility in the current situation of information
disclosure, namely, enterprises in the following sectors of the economy: Metallurgy
and Mining, Oil and Gas, Power Industry, Communications and Data Transmission,
Banking and Finance, Chemistry and Petrochemistry, etc. The weight in the Index is
determined by market capitalization, taking into account free-float, currency of
payment is rubles. According to the authors, the index has been very volatile over
the past 3 years: in 2019 its annual average value was 0.19, in 2020—0.33, and in
2021—0.28. This situation has developed due to the presence of social and financial
crises in modern economic realities, given their global scale.
Features of Financing the Green-Digital Way in Russia 65

Assessing the situation on the “green” debt market, its main issuers selling issues
on the Moscow Exchange (MOEX) should be emphasized: Center-Invest PJSC CB,
Garant-Invest FPC, SFO RUSol1 LLC, with a declared minimum yield of instru-
ments from 8.00% to maximum 16.02% per annum, for example, the yield of
instruments on the London Stock Exchange (LSE) varies from 0.00 to 15.00%, as
well as issuers of the non-financial sector, represented by companies: Norilsk Nickel
MMC, Russian Railways JSC, Gazprom PJSC, RusHydro PJSC, etc.

Conclusion

In the above study, the authors conclude that in Russia there are all the necessary
infrastructure elements for the ESG banking development, there is a potential for
sustainable financing, but there is a lack of methodological inventions for assessing
key indicators of interaction and interdependence of the financial and real sectors,
especially the energy sector, as well as a lack of unified approaches to the formation
and disclosure of non-financial information.
In addition, digitalization and greening are closely related to each other, and the
influence of information and communication technologies is only increasing as they
penetrate into all spheres of society, and environmental spending contributes to the
expansion of the introduction of the “green-digital” way. The article examines the
relationship between the above factors and concludes on the development of ele-
ments of digitalization, greening and financing within a single result.
The analysis showed that local “green” projects are financed through bonds,
taking into account sustainable development indicators based on the Russian taxon-
omy with a wide list of criteria important for the Russian carbon-intensive economy.
Thus, the authors conclude that the sector of “green” debt instruments has certain
opportunities for development, provided that incentives for the active use of the best
available technologies (BAT) are strengthened and the intensive expansion of
environmentally friendly industries.

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Innovative Transformations Management
in Organizations in the Context of Its
Sustainable Development Under Digital
Transformation of the Economy

Vladimir A. Kunin and Alexey A. Pestrikov

Introduction

The current stage of economic development is characterized by the need to meet the
triad of requirements of the modern market:
– reduction of decision-making time (T2D);
– reduction of decision execution time (T2E);
– fast product launch to the market (T2M).
The implementation of these requirements is impossible without innovative trans-
formations, which in conditions of rapid changes, high market volatility and uncer-
tainty are associated with high risks. The mentioned external factors create barriers
to the harmonious provision of the economic, environmental and social components
of the concept of sustainable development and create a threat of loss of financial
stability of the organization. In this regard, the support of innovative transformations
of the organization by monitoring key indicators of the result and efficiency of
entrepreneurial activity and the adequate use of modern digital services and tools for
the successful implementation of the principles of the concept of sustainable devel-
opment is of particular relevance. The objective of this research is to develop
recommendations on the formation of index system for effective innovative trans-
formations management in organizations and the practical application of modern
digital technologies to ensure the implementation of Sustainable development prin-
ciples. Studies of performance indicators conducted earlier and, for example,
outlined in (Maltz et al., 2003; Spitzer, 2007) contain quite exhaustive information
about the methodology of forming a system of indicators and evaluating the

V. A. Kunin · A. A. Pestrikov (✉)

Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 67

A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_8
68 V. A. Kunin and A. A. Pestrikov

effectiveness of the organization, but they do not allow us to evaluate the use of the
latest knowledge, the volume of which doubles every 10–15 years in the modern
world. In particular, this applies to knowledge in the fields of knowledge-intensive
and innovative management areas, the latest hardware for management initiatives, as
well as geopolitical and economic trends.
To achieve this goal, the following tasks were solved in the article:
identify and systematize key indicators of the result and efficiency of entrepreneurial
activity that require monitoring in the implementation of innovative transforma-
tions of the organization;
identify the most promising areas of application of digital services and tools for the
implementation of the principles of the concept of sustainable development;
to formalize the advantages and disadvantages of using cryptocurrencies and to give
recommendations on the energy efficient organization of the mining process;
to give recommendations on the practical application of recurrent neural networks
for solving problems of forecasting commodity—cash flows and accounts receiv-
able management.

Materials and Methods

In this article the methods of a systematic approach, comparative, factorial and

logical analysis, synthesis, are applied in order to identify and systematize key
Sustainable Development Indicators and to reveal the most advanced digital tech-
nologies that are aimed at achieving Sustainable Development Goals and reaching
synergies of the joint application of the sustainable development methodology and
these technologies. To solve the tasks set in the article, the data provided in the
Russian and foreign scientific literature, including publications from the Scopus
database, are used. This article uses methods of a systematic approach, comparative,
factorial and logical analysis, synthesis, on the basis of which key indicators of
sustainable development are identified and systematized and the most promising
digital technologies aimed at achieving the goals of sustainable development and the
synergetic effect of the joint application of the methodology of sustainable devel-
opment and these technologies are identified. To solve the tasks set in the article, the
data provided in the Russian and foreign scientific literature, including publications
from the Scopus database, are used. The formation of a system of key indicators and
the most promising digital technologies is carried out on the basis of a reductionist
approach, which provides for the solution of these tasks for each of the four selected
components of the organization. In addition, the authors apply an adaptive approach
to the formation of a business model of sustainable development of the organization,
based on the identification and systematization of trends in the development of the
modern VUCA world, characterized by high variability and uncertainty.
Innovative Transformations Management in Organizations in the Context. . . 69

Results

The current conditions of economic and business development in Russia and in the
world dictate the need to radically revise the approach to the operational manage-
ment of the organization and methods of strategic planning, in order to ensure its
competitiveness and achieve sustainable development goals.
Business models focused on the “race for the leader” are untenable in modern
conditions. Following such business models only aggravates the lag behind leading
organizations that actively implement and apply innovative approaches and technol-
ogies in their economic activities. The essence of innovative transformations in the
organization is the use of either new (not previously used) methods of influencing
the administrative, economic and socio-cultural sectors Innovative transformations
of an organization have a significant, and in many situations, decisive impact on key
indicators of results and efficiency of entrepreneurial activity and, as a result, on the
competitiveness of the organization. Moreover, this impact in the short, medium and
long term may be different. In particular, the implementation of investment projects
aimed at innovative transformation of the organization usually requires the involve-
ment of large credit resources. Servicing the debt that arises in this case can lead in
the short and medium term to a temporary subsidence of key profit and profitability
indicators that characterize the results and efficiency of entrepreneurial activity. At
the same time, in the long term, the use of these resources is a factor in the growth of
these indicators and, as a consequence, a factor in ensuring the competitive devel-
opment of the organization.
The issues of forming a system of indicators of the result and efficiency of
entrepreneurial activity are considered in many works of Russian and foreign
researchers. Based on the generalization of these results, it is possible to identify
key indicators that require monitoring in order to implement the principles of
sustainable development. The selected indicators are summarized in Table 1.
The following designations are used in Table 1 and below: RN—revenue–net;
GR—revenue–gross; TCP—technological cost; MCE—amount of management and
commercial expenses; BOEI—balance of other income and expenses; IT—income
tax; DP—dividend payments; VC—variable costs; DP—interest payable; DC—
depreciation charges; RNP—reinvested net profit; EC —the average amount of
equity for the period of profit; A—the average amount of assets for the period of
profit; BC—the average amount of borrowed capital for the period of profit; N —
average number of employees.
In order to ensure the implementation of the principles of sustainable develop-
ment, it is advisable to supplement the above system of indicators with key indica-
tors of risk factors for loss of financial stability. Based on the analysis of financial
security factors and the specifics of the impact of operational and financial leverage,
given in Kunin (2015), we can distinguish these indicators, which are summarized in
Table 2.
The following designations are used in Table 2: RN—revenue, RBEP—revenue–
net at the break-even point; FC—fixed costs; TC—total costs.
70 V. A. Kunin and A. A. Pestrikov

Table 1 Key indicators of the result and efficiency of entrepreneurial activity

Result indicators Performance indicators
Name and Evaluation
Name and designation Evaluation formula designation formula
Gross profit CP EP = RN - TCP SGI Sustainable SGI = RNP
EC
Growth Ratio
EFS Sales Profit EFS = CP - MCE Return on equity PFS = EC
NP

ROE
Profit before tax EBT EBT = EFS + BOIE Return on assets ROA = NPA
ROA
NP net profit NP = PBT - IT ROS return on ROS = RN
NP

sales
AP Retained earnings AP = NP - DP Profitability of ROP = TCP
EP

production ROP
Margin profit MP = TC - VC Net profit per NPW = NP N
employee NPW
Earnings before interest and taxes EBIT = EBT + DP
EBIT
Earnings before interest, taxes and EBITDA = EBIT + DC
amortization EBITDA

Table 2 Key indicators of risk factors for loss of financial stability

Key indicators of risk factors for loss of
financial stability
Name and designation Evaluation formula Note
Safety factor SF SF = RN -RNRBEP
100 Shows how many percent an organization can
reduce revenue and remain in the profit zone at
the same time
Operating Leverage OLR = FC
TC
It is determined by the share of fixed costs in the
ratio OLR total costs of the organization
Financial leverage ratio FLR = BC It is determined by the amount of borrowed
EC
(financial leverage) capital per unit of the organization’s own
FLR capital

Particular attention should be paid to indicators of the impact of operational and

financial levers when managing the risk of loss of financial stability. The joint action
of levers during innovative transformations of an organization in conditions of
uncertainty and increased exposure to external risks can lead to a loss of financial
stability. Among the most dangerous external risks, it is necessary to highlight the
risk of deterioration of market conditions and the risk of an increase in the cost of
credit resources. As you know, the attraction and use of credit resources necessary to
finance innovative transformations of the organization is associated with a change in
financial profitability. This change is determined by the effect of financial leverage,
estimated by the formula 1:
Innovative Transformations Management in Organizations in the Context. . . 71

Table 3 Key indicators of principles of sustainable development implementation

Evaluation
Class of indicators Indicators formula
Indicators of technological Coefficient of renewal of fixed assets K ufa =
Cp
C ep
development Kufa
Power utilization factor Kpu K pu = Pu
PΣ
Technological automation coefficient K ta = Na
NΣ
Kta
Performance indicators of strate- Coefficient of implementation of strate- K si = N si
N rsi
gic initiatives gic initiatives Kst
Frequency of iterations related to feed- f= Na
T
back from clients and team ƒ
The cost of attracting one client or user CAC = E
NCA
100
CAC
Human resources management Employee Net Loyalty Index eNPS eNPS = P - D
performance indicators Staff turnover rate Kt Kt = Nd
N
Indicators of efficiency and effec- Management effectiveness coefficient Qv
L
K mr = 1 - F t
EOF
tiveness of management Kmr
Efficiency coefficient of the organiza- Km = PΣ
Pm
tional structure Ko
Management cost ratio Ke Ke = EΣ
Em

BC
E fl = ð1- TRP Þ
ðER- Rc Þ
ð1Þ
EC

The sign of this effect is determined by the sign of the differential and in the case
when under the influence of external negative factors the effect becomes negative, it
means that from a financial point of view, the attraction and use of credit resources
was counterproductive, since it reduced the amount of profit per unit of equity of the
organization. The combined impact of the risks of market deterioration and the rise
in the cost of credit resources reduces the economic profitability of the organization
in terms of net operating profit and increases the interest rate of credit. This can cause
a sharp change in the sign of the financial leverage effect and lead to a loss of
financial stability if the negative value of the effect in absolute terms exceeds the
value of financial profitability before attracting and using borrowed capital.
Along with the key indicators of the result and efficiency of entrepreneurial
activity and the risk of loss of financial stability, the level of implementation of the
principles of sustainable development, according to the authors, is characterized by
the following classes of indicators: indicators of technological development, indica-
tors of the effectiveness of strategic initiatives, indicators of the effectiveness of
personnel management and indicators of efficiency and effectiveness of manage-
ment, given in Table 3.
The following designations are used in Table 3: Cp—the cost of fixed assets
purchased during the reporting period; Cbp—the cost of fixed assets at the end of the
reporting period; Pu—the capacity of the fixed assets used; P—the total capacity of
72 V. A. Kunin and A. A. Pestrikov

Organization X

Economics/Technology Strategy/Business Idea

25,0% 25,0%

Ecology/Sociology Management/Tactics
25,0% 25,0%

Fig. 1 Graphic illustration of the components of the organization

fixed assets; Na—the number of production equipment with automation of installa-

tion and removal processes; N—total number of production equipment facilities;
Nrsi—number of implemented strategic initiatives; Nsi—the total number of strategic
initiatives; Na—the number of iterations associated with feedback from customers
and the team for a given period of time; TE—the cost of attracting new customers or
users for a given period of time; NCA—the number of new customers or users
attracted for a given period of time; P—the percentage of employees loyal to the
organization; D—the percentage of employees who are critical of the organization;
Nd—the number of employees dismissed during this period; N—the average number
of employees; Qv—costs per period per manager; Ls—the proportion of managers in
the total staff; Ft—capital ratio; EOF—capital return. Wvd—the number of works
with broken deadlines, W—the total number of completed works; E—total person-
nel costs; Em—management personnel costs.
Thus, as a result of the analysis of indicators reflecting various aspects of the
economic activity and functioning of the organization, the key indicators that most
fully reflect the sustainability of its condition and require monitoring are identified
and systematized in the context of the implementation of the principles of sustainable
development in the process of its innovative transformations.
Socio-economic systems, to which organizations belong, are complex multifac-
torial systems subject to random external influences. To determine the criteria for the
stability of such systems, it is necessary to identify their essence and specifics.
With regard to organizations, the authors propose to adhere to the principle of
reductionism, focused on conducting research on the components of the system,
followed by the dissemination of the research result to the system as a whole. In this
context, it is proposed to present a modern organization as a set of equilibrium
components, each of which can have a significant impact on the indicators of
sustainable development. A graphic illustration of the individual components of
the organization is shown in Fig. 1.
The correspondence of key indicators of sustainable development to individual
components of the organization is presented in Table 4.
Innovative Transformations Management in Organizations in the Context. . . 73

Table 4 Compliance of key indicators of sustainable development with individual components of

the organization
Component of the Class of indicators of sustainable
organization development Note
Economics/ Key indicators of the result and efficiency The indicators of this class
technology of entrepreneurial activity are given in Table 1
Key indicators of risk factors for loss of The indicators of this class
financial stability are given in Table 2
Key indicators of technological The indicators of this class
development are given in Table 3
Strategy/business Key performance indicators of strategic The indicators of this class
idea initiatives are given in Table 3
Ecology/sociology Key performance indicators of personnel The indicators of this class
management are given in Table 3
Management/ Key indicators of efficiency and effective- The indicators of this class
tactics ness of management are given in Table 3

When managing the innovative development of an organization, it is important to

identify the most promising digital technologies, the use of which is most appropri-
ate for achieving sustainable development goals.
A number of publications in the scientific literature and, in particular, such works
as Makarov et al. (2020), Nadkarni and Prügl (2021), Tashenova et al. (2019), Vite
and Morbiducci (2021), Wysokinska (2021), etc. are devoted to the problem of the
study of promising digital technologies in relation to solving various industrial and
economic tasks. However, these and other publications do not focus on the most
promising technologies for solving sustainable development problems, although this
issue has its own specifics and requires separate research.
In the article, in relation to the implementation of the Sustainable Development
Goals, the authors identify the four most promising digital technologies in their
opinion:
– blockchain
– machine learning
– cloud technologies
– 3D printing
In the context of achieving the Sustainable Development Goals, we will identify and
explore promising areas of application of these technologies for the components of
the organization.

Economics/Technology

In the context of strong changes in economic and financial relations, and active entry
into the financial markets of cryptocurrencies, there is a need to explore the
74 V. A. Kunin and A. A. Pestrikov

advantages and disadvantages of their use using blockchain technology in the

context of implementing the principles of the concept of sustainable development.
Firstly, the blockchain technology underlying the functioning of cryptocurrencies
allows you to exchange payment information and make transfers (Laurent et al.,
2022), bypassing SWIFT, providing an acceptable level of reliability and reliability
while avoiding external risks of disconnection from the payment system. with the
ability to operate with various special tools and further convert them into national
currencies.
Secondly, the undoubted advantage of settlements in cryptocurrency is the
absence of the need to pay for intermediary operations of the banking system,
which allows to increase the profitability of settlement operations. To date, there
are many sellers (Mayer, 2018) who accept various cryptocurrencies as official
settlements for large supplies of raw materials and materials. the low volume of
indirect costs and high marginality can increase the value of the ROE indicator by
tens of percent.
It follows from the above that cryptocurrencies can be considered as a tool for
investment diversification and inclusion in the investment portfolio. However,
cryptocurrencies have very high volatility, which makes them a high-risk
(Sinyavsky, 2019). In addition, the use of various hardware for cryptocurrency
mining is associated with high energy consumption and the allocation of thermal
capacity.
Artificial neural networks are an important innovative tool that can be effectively
used to achieve the goals of sustainable development of an organization. They can,
in particular, be used to solve problems of forecasting, classification, clustering,
regression and a number of others. Thus, when evaluating the effectiveness of
investment projects for the development of an organization, it is extremely important
to ensure the reliability of forecasting the expected cash flows from the implemen-
tation of the project. Estimates of the performance indicators of investment projects
are characterized by a high sensitivity of performance indicators and, above all, net
present income to errors in forecasting cash flows. A certain improvement in the
quality of forecasting can be achieved by using machine learning technology using
artificial neural networks or neural network committees. Another possible aspect of
the application of artificial neural networks is their use. to predict the terms of
repayment, the probability of timely repayment and repayment of receivables in
general, for which multi-factor models are traditionally used. To solve these prob-
lems, according to the authors, the use of neural networks with multiple nonlinear
feedbacks between layers of neural-like elements and the ability of networks to
implement machine learning methods involving the formation of an algorithm for
the functioning of the network itself is promising. The authors propose to include in
the neural network data a learning module that allows analyzing the data obtained
based on the actual results of hypothesis testing. The use of high-precision methods
of forecasting the reliability of counterparties and the probabilities of accumulation
of accounts receivable can allow an organization to reduce the actual duration of the
period of accounts receivable and increase business activity and profitability.
Innovative Transformations Management in Organizations in the Context. . . 75

Strategy/Business Idea

The most important factor in the innovative transformation of an organization is the

transformation of strategic approaches and way of thinking aimed at the competitive
formation and development of the organization. One of the most well-known models
of strategic planning and management is the Balanced Scorecard (von Leipzig et al.,
2017), which is used to provide management with a quick but thorough overview of
the company’s activities at the strategic level.
The strategic models of the Business Model Canvas enterprise can be considered
innovative for many industries in which attempts have been made to replace the
classic long-term development strategy with them. We highlight two main advan-
tages of these models: the simplified nature of the Business Model Canvas worksheet
and the orientation of model users on the main idea of the company aimed at its
competitive sustainable development. However, in our opinion, these models do not
have sufficient flexibility necessary to ensure sustainable development in the modern
VUCA world, characterized by high variability and uncertainty.
In this paper, the use of an adaptive approach to the formation of a business model
is proposed. In the conditions of the VUCA world, in the presence of a constantly
changing internal and external environment, the formation of a rigid business
strategy and its corresponding business model becomes counterproductive. In this
regard, within the framework of the adaptive business model, the formation and
approval of key blocks denoting the concept of the product and its main innovative
properties are proposed. Other components of a business strategy should be initially
defined as variable components, the choice of which is not predetermined, but
allowed as an alternative hypothesis. Verification of these hypotheses can be carried
out in advance when creating and using digital counterparts of the main business
processes Using digital modeling of various business and social situations with
different parameters of input and output data allows you to test hypotheses at the
stage of business model formation and provide for different outcomes of business
strategy implementation in most cases, with the exception of technological
singularity.
The use of an adaptive business model, with implemented hypothesis tests, can
significantly increase the parameters of the organization’s stability in terms of CAC.
In our opinion, achieving high values of this coefficient is significantly simplified
due to the fact that attracting new customers is directly dependent on the implemen-
tation of various scenarios of user behavior and the response of the organization to
them, including the adaptation of the business strategy.
An important factor in increasing the flexibility and efficiency of management is
the organization of fractal business processes, characterized by a greater degree of
freedom of decision–making than with conventional procedures for solving prob-
lems. At the same time, for large organizations, according to the authors, fractal
business processes should be allocated to outsourcing enterprises, working out the
allocation process using digital twins (Kunin & Lugert, 2022), the use of which will
76 V. A. Kunin and A. A. Pestrikov

guarantee the quality of goods/services supplied and will contribute to the rapid
launch of an outsourcing enterprise (Gault, 2019).

Ecology/Sociology

For a modern organization, an important direction of innovative transformations is

the development of a social internal structure, an ecosystem in which employees of
different generations and worldviews are involved. Young specialists in a modern
organization representing generation Z, especially if they are highly qualified and
in-demand applicants, are sufficiently independent of financial remuneration, work-
ing location, social guarantees and other traditional corporate values. For such
specialists, comfortable working conditions, high technical and resource support,
as well as interesting and developing tasks are important. In this regard, qualified
“talent management” comes to the fore for the organization. In this article, we
propose to use a talent management system in a business strategy and implement
it. into everyday processes. The recruitment and retention of employees cannot be
assigned exclusively to the HR department, rather it should be practiced at all levels
of the organization. The business strategy should include the responsibilities of line
managers to develop the skills of their direct subordinates.
In this regard, an important aspect of the company’s development should be the
organization of informing employees about the goals and mission of the company
and involving all employees in a team of like-minded people focused on achieving
these goals.
The talent management strategy can be supported by technologies such as HRIS
(HR Management Information Systems) or HRMS (HR Management Systems).
These systems provide a database in which complete records of all employee data
are stored, which begin with the first point of contact with the employee and include
reports on them to their management (Esangbedo et al., 2021). HRMS (Human
Resource Information Systems) software helps HR department employees to per-
form a variety of talent management operations: from employee data management to
payroll, recruitment, benefits management, training, HR process management,
employee engagement and attendance control.
However, due to the difficulties in acquiring and using imported specialized
software and the need to pay for expensive accounts, many companies cannot afford
to carry out productive personnel management.
In this article, it is proposed to use universal cloud services and ecosystems, such
as Google docs, yandex documents, etc., for effective personnel management. These
services are widespread and most often free. Their use for personnel management
purposes makes it possible for almost any employee of the HR department to set up
and maintain information systems with mass or limited access. You can also attract
middle-level programmers who are ready to develop an affordable, workable and
effective HRIS for an affordable fee.
Innovative Transformations Management in Organizations in the Context. . . 77

The environmental component is also extremely important in the work of modern

organizations, because along with reducing environmental risks, it affects the loyalty
of staff and consumers to the brand. According to the authors, due to the introduction
of modern digital technologies and, in particular, 3D printing technologies, a
significant breakthrough can be achieved in solving the problem of waste recycling
and the transition to a circular economy.

Management/Tactics

As you know, a sustainable entrepreneurial ecosystem is an ecosystem that is

focused on sustainable development (Aliabadi et al., 2022), which is possible
when analyzing, filtering and, if necessary, correcting all incoming data.
As noted above, the most important requirement of the modern market is the
speed of decision-making. If a business generates a large amount of data, then a
significant factor in increasing the speed of decision-making is the introduction of a
CRM system with artificial intelligence elements aimed at processing large arrays of
unstructured data for decision-making purposes and optimizing the company’s
business processes.
In modern conditions, not only the process of obtaining and analyzing informa-
tion is important for a manager, but also its security. Therefore, in addition to
monitoring the decision-making speed coefficient, for the effective use of data
analysis systems, in our opinion, it is necessary to monitor the information security
coefficient, which takes into account the amount of information generated, the
number of local storage locations used and the frequency of updating backups. In
the paradigm of the modern world and the high intensity of cybercrime, at least three
main methods should be used: backup to physical media according to a schedule via
a secure channel, backup to a cloud disk of a well-known IT operator and physical
backup to a removable disk with disconnection from the local network.

Discussion

The identification of key indicators of the result and efficiency of entrepreneurial

activity, the use of which is recommended in this paper in order to implement the
principles of sustainable development, is based on the following principles proposed
by the authors:
– unambiguity of interpretation of the selected indicators;
– use of indicators in approved financial statements and generally accepted man-
agement accounting methods;
– availability of standard indicator assessment software;
78 V. A. Kunin and A. A. Pestrikov

– an end-to-end hierarchical structure of the allocated indicators, which allows to

trace and take into account factor relationships between indicators of different
levels of the hierarchy;
The implementation of the latter principle is extremely important for managing the
effectiveness of entrepreneurial activity on a multidimensional vector of
non-orthogonal efficiency factors.
The system of key indicators of risk factors for loss of financial stability includes
indicators that determine the strength of the joint impact of operational and financial
leverage and have a determining effect on the risk of loss of financial stability. In
addition, the authors have included a safety factor in this system of indicators, which
characterizes the financial strength of an organization with a deterioration in market
conditions and a decrease in profitability indicators that determine the sign of
financial leverage and, as a consequence, the impact of borrowed capital on the
financial stability of the organization.
The selected indicators of technological development in the article include a triad
of indicators characterizing the levels of renewal, automation and use of technolog-
ical capacities, which, according to the authors, most fully characterizes the techno-
logical development of the organization.
The class of indicators of the effectiveness of the implementation of strategic
initiatives includes indicators that characterize the degree and effectiveness of the
implementation of strategic initiatives, as well as the attitude of customers to the
results of this implementation.
The class of indicators of the effectiveness of personnel management in the article
includes indicators that characterize employee loyalty and staff turnover, which,
according to the authors, most succinctly reflects the effectiveness of personnel
management from the standpoint of minimizing personnel risks and ensuring the
sustainable development of the organization.
The system of indicators of efficiency and effectiveness of management includes
a triad of indicators of management effectiveness, efficiency of organizational
structure and management costs, which allows you to correlate the quality of
management with the level of management costs.
The practical application of modern digital technologies in combination with the
organization’s focus on solving sustainable development problems gives a syner-
gistic effect, manifested in a potential increase in the efficiency of economic activity
and the organization’s resistance to the negative impact of increased external risks.
At the same time, digital technologies require solving a number of problematic
issues that hinder their implementation, and in some situations, compliance with
the principles of the concept of sustainable development. Thus, high energy con-
sumption in mining cryptocurrencies from the point of view of solving problems of
energy, environmental and climate security is a negative factor, on the other hand,
contributes to the development and implementation of innovations aimed at reducing
the negative consequences of mining. In particular, BiXBiT has developed a solution
that not only makes mining more comfortable, but also allows efficient use of heat
based on the use of a so-called dielectric (immersion) liquid, which accumulates the
Innovative Transformations Management in Organizations in the Context. . . 79

heat generated and can be used to heat rooms. The average device that produces
cryptocurrency mining consumes electricity and emits heat of at least 2000 W, which
is comparable to the power of a heater used for heating 20 m2 of a building.
A certain barrier to the practical application of machine learning methods using
artificial neural networks to solve sustainable development problems is the rather
high cost of developing and implementing problem–oriented neural networks and
other tools for analyzing large amounts of data. In most situations, this makes these
tools available only to fairly small businesses. However, further development of
modern digital technologies and, in particular, affordable digital “low code” plat-
forms will make the use of these tools more accessible.
The problem of many companies today is that huge efforts are being made to
attract employees to their company, but not enough attention is paid to the retention
and development of talents. The use of open cloud solutions, coupled with the high
practical efficiency of personnel and talent management information systems, allows
the company to significantly (up to 30%) increase the eNPS coefficient, especially if
it is a young innovative organization. For example, we can give OOO “Light”, with a
matrix organizational structure. A 12-month retrospective analysis showed:
– significant deviations in the effectiveness of the team with insufficient awareness
on the part of the project manager
– different efficiency and power of the team when working as a product owner
– different resource costs of different teams when performing similar projects
– lack of timely feedback and information about the work of other teams and the
profits received.
– staff turnover in the company due to low awareness and unclear tasks
The information system of effective personnel management, created only by the
head of the company and the HR manager without the involvement of third-party
specialists based on google sheets, has become an important factor in improving the
efficiency of the company’s business activities and increasing earnings before
interest and taxes EBIT by 19.5 times. Based on the above, it can be concluded
that in modern personnel-dependent organizations, where the main item of expen-
diture is remuneration, resource provision of personnel and the cost of attracting
them, the most important factor for sustainable development is the creation of its
own HRMS system.
The use of 3D printing for waste recycling (in particular, plastic) allows the
company not only to reduce disposal costs, but also to receive additional financial
benefits from the sale of secondary raw materials.
Due to the profit from the sale of useful waste, it is possible to significantly reduce
the company’s costs for waste management services, develop the social component
of its activities and also use the funds received to increase customer loyalty.
For example, the company makes as a public offer information about the ability
of customers to deliver containers from the products used and in return receive a
10% discount on the company’s goods. In turn, the company undertakes to recycle
used packaging and help restore the environment. As a result, the company receives
an increase in CAC and CRR indicators of customer loyalty. In addition, the
80 V. A. Kunin and A. A. Pestrikov

company gets the opportunity to carry out paid waste disposal or independently
recycle returnable containers.
Introduction of domestic CRM—information collection and analysis systems
(Bitrix 24, 1c) allows you to maintain information security and minimize the risks
of losing access to the system in case of sanctions pressure, as well as reduce the
indicators of the specific number of managers in the state Foreign experience in
implementing solutions using artificial intelligence in Microsoft Dynamics 365 and a
number of other CRM systems allows businesses to automate routine operations,
reduce risks due to the possibility of processing large arrays of multidimensional
information with subsequent visualization of the results obtained and increase the
efficiency of economic activity.
It is possible to fully assess the economic efficiency and feasibility of applying
innovative transformations through classical methods of evaluating the effectiveness
of investment projects based on discounted estimates. However, special attention
should be paid to the accuracy and reliability of estimates of expected cash flows
from the implementation of the project and taking into account the synergetic effect
associated with the introduction of innovations.
In the conditions of rapid changes characteristic of the modern stage of business
and society development, the introduction of innovations is of key importance for
the effective competitive development of organizations. The determining factors of
competitive development of organizations are strategic positioning, operational
efficiency and innovative potential. Ensuring competitive innovation potential
requires constant innovation when using a flexible business strategy for sustainable
development of the organization, modern innovative approaches to retaining and
stimulating talented promising employees, constant attention to the social sphere and
environmental friendliness of economic activity. At the same time, it should be
borne in mind that the introduction of modern innovative production technologies,
systems for storing and analyzing large amounts of data, machine learning methods
using artificial neural networks and other innovative tools in many cases requires
significant investment costs, which in conditions of uncertainty and economic
instability is associated with increased risks of loss of financial stability. These
risks are the highest for organizations characterized by a high level of structural
risk due to the specifics of their activities, i.e. the risk of non-compliance of the cost
structure with the market conditions. In this regard, a preventive assessment of the
compliance of an increase in the level of fixed costs in the implementation of revenue
growth strategies with the maximum allowable value of this increase, estimated by
the formula (Kunin, 2015), is of particular importance.

bc
k crit = - ðc- 1Þ, ð2Þ
f

where
kcrit—the critical value of the fixed cost growth coefficient;
b—revenue growth rate;
Innovative Transformations Management in Organizations in the Context. . . 81

c—the starting position determined by the ratio of revenue to the value of revenue at
the break-even point;
f—is a parameter determined by the change in the share of variable costs in revenue,
and equal to the ratio of marginal profits before and after the change in revenue as
a result of innovation.
If the fixed cost growth coefficient exceeds the maximum allowable value, the
considered revenue growth strategy should be considered counterproductive and
adjusted, bringing the planned costs in line with the expected market conditions.
Failure to comply with this recommendation may entail an unacceptably high level
of structural risk and, as a result, the risk of loss of financial stability.
In addition, attention should be paid to the importance of adequate forecasting of
expected cash flows from the implementation of innovation and investment projects,
which also requires the use of modern digital services and data analysis tools.

Conclusion

To improve the process of managing innovative transformations of an organization,

the article suggests a reductionist approach involving the representation of an
organization by a set of four equilibrium components: “Economics/Technology”,
“Strategy/business idea”, “Ecology/Sociology”, “Management/Tactics”. The appli-
cation of this approach made it possible to build a system of key indicators of the
effectiveness and efficiency of the organization’s sustainable development process
and identify the most promising technologies for achieving sustainable development
goals in the context of digital transformation of the economy, which the authors
include blockchain, machine learning, cloud technologies and 3D printing. The
article identifies and examines the advantages and disadvantages of these technolo-
gies, and the barriers preventing their wider dissemination. Based on the results of
the research conducted in the article, recommendations are proposed aimed at the
practical application of the proposed digital technologies in conditions of uncertainty
and focused on reducing the risk of loss of financial stability in unstable environ-
mental conditions.

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International Legal and Economic Aspects
of Ensuring Energy and Climate Safety
in Modern Conditions

Yuriy V. Mishalchenko, Timofey N. Dovbush ,

and Maria Yu. Mishalchenko

Introduction

The need to ensure climate safety has become one of the priority tasks facing
humanity in the twenty-first century. Global warming carries risks for humanity
associated with the flooding of a significant number of coastal areas, changes in the
conditions for agricultural production, aggravation of problems in the field of food
supply, an increase in the scale of climate migration of people and the aggravation of
local conflicts for access to natural resources and sources of drinking water.
The efforts of one state are not enough to solve these problems; coordinated
activity of the entire world community is required. In recent years, a number of
important documents in the field of climate safety have been adopted at the interna-
tional level, including the United Nations Framework Convention on Climate
Change and the Paris Agreement.
This UN Convention was, in fact, one of the first international acts aimed at the
legal regulation of climate safety. Within the framework of this Convention it was
supposed to fix greenhouse gas emissions at a safe level in order to provide a
sufficient period for the natural adaptation of the environment to climate change
and maintain sustainable economic development (Bardin et al., 2021).
This international act reflected the specific obligations of a number of national
states to ensure long-term climate safety, including financial obligations towards
developing countries in the field of sustainable climate development.

Y. V. Mishalchenko · T. N. Dovbush (✉)

Saint-Petersburg Institute (branch) of the All-Russian State University of Justice (RPA of the
Ministry of Justice of Russia), St. Petersburg, Russian Federation
M. Yu. Mishalchenko
Saint-Petersburg State Marine Technical University, St. Petersburg, Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 83

A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_9
84 Y. V. Mishalchenko et al.

In the future, to develop the provisions of this Convention, the Kyoto Protocol
was adopted, within the framework of which an attempt to create a mechanism for
rationing greenhouse gas emissions and a system of international reporting on the
fulfillment of obligations in the climate sphere was made at the international level.
Under the Kyoto Protocol, the participating countries have committed them-
selves to achieve by 2012 a reduction in greenhouse gas emissions by 5.2%
compared to the 1990 level (Figures et al., 2021).
At the same time, each state determined its obligations to reduce emissions, in
particular, the Russian Federation undertook to maintain greenhouse gas emissions
at the 1990 level.
The Kyoto Protocol to the above Сonvention provided for economic mechanisms
to encourage countries to green their production processes through international
greenhouse gas emissions trading, mechanisms for joint clean development.
Essentially, the Kyoto Protocol laid the foundation for the functioning of the
international greenhouse gas market. This Protocol also created a legal basis for the
implementation of projects to reduce greenhouse gas emissions in developing
countries through investments from developed countries.
During the 7th UN Conference on Climate Change, held in November 2001 in
Marrakech, the countries participating in the UN Convention on Climate Change
regulated a number of technical issues related to the implementation of the pro-
visions of the Kyoto Protocol, in particular, the need to create national systems for
estimating greenhouse emissions in countries and national registers for recording
greenhouse gas emissions. Within the framework of this Conference, issues related
to the transfer of technologies in the implementation of clean development mecha-
nisms were also resolved, under which developed countries invest funds or transfer
technologies to another state in order to reduce carbon emissions, and in return
receive the right to additional emissions in their country in the amount of emission
reductions in the host state.
The Russian Federation ratified the Kyoto Protocol in 2004, and this legal act
entered into force for the country in 2005. However, in 2012, when the first stage of
the said Protocol expired, the Russian Federation, as well as Canada and Japan,
refused to extend the validity of this international act for their countries for another
8 years. The main reason that prompted the Russian Federation to withdraw from the
Kyoto Protocol was that the United States did not ratify this protocol, China also did
not assume any obligations under this international act. At the same time, the United
States and China jointly accounted for more than 40% of global greenhouse gas
emissions in 2012. Thus, without the participation of these countries, emission
restrictions among other states had little effect on the rate of global warming.
In addition, Russia’s alignment with the Kyoto Protocol until 2012 was not
burdensome for the country’s industry, since it was necessary to maintain emissions
at the 1990 level that was not difficult given the decline in industrial production in
the country in 1990–2000.
As part of the second stage of the Kyoto Protocol, intended to last until 2020, the
countries of the European Union, Australia, Belarus, Ukraine and a number of other
states assumed obligations to further reduce carbon emissions.
International Legal and Economic Aspects of Ensuring Energy and. . . 85

In 2015, the United Nations announced that the states that made commitments
under the Kyoto Protocol were able to reduce greenhouse gas emissions by more
than 20% and that this document proved that the international community can jointly
solve global problems.
In the winter of 2015 a new international climate agreement that replaced the
Kyoto Protocol was approved as part of the 21st UN Conference on Climate Change
in Paris. For the first time, the Paris Agreement brought together the efforts of the
international community to restrain adverse climate change.
The main goal of the Paris Agreement is to intensify the efforts of the interna-
tional community to implement the UN Framework Convention on Climate Change
in order to keep the increase in the average temperature on the planet this century
within 2 °C and to find means to keep this average temperature within 1.5 °C
(Bashmakov et al., 2021).
This Agreement provides for the adoption of obligations to reduce carbon
emissions by each associating state, joint activities to ensure climate safety and
provide assistance to developing countries to mitigate the negative consequences for
them caused by climate change and the implementation of climate goals by these
countries.
Emerging economies are initially given the right to determine the extent of their
participation in ensuring global climate safety, but in stages these countries will need
to use targets to limit carbon emissions in their territory. At the same time, all parties
to the Agreement must maintain coherent reporting confirming the reduction of
carbon emissions at the national level within the framework of their obligations.
Within the framework of this Agreement, it is envisaged that every 5 years the
parties to the Agreement increase the extent of their participation in ensuring global
climate safety. According to the participants of this Agreement, the increase of
participation extent of each party may allow to achieve the main goal of keeping
the average temperature within the stated limits.
The Russian Federation ratified the Paris Agreement in September 2019, the
United States ratified this agreement in September 2016, but in the summer of 2017
announced the country’s withdrawal from this document because the implementa-
tion of its provisions could lead to the loss of more than 2.7 million jobs by 2025.
The U.S. withdrawal from the Paris Agreement was officially completed in
November 2020.
Meanwhile, the Paris Agreement did not establish coercive mechanisms for
ensuring the obligations assumed by the parties or the possibility of imposing
sanctions in the event that any of the participants fails to fulfill the stated goals.
Within the framework of this Agreement, it is only possible to verify the information
provided by national authorities on their achievements on the issue of reducing
carbon emissions that required the international community to develop other docu-
ments that could globally affect climate change.
However, in the territory of the Russian Federation, the rate of global warming is
2.5 times higher than the global indicators (Bardin et al., 2021). At the same time, in
addition to the adverse effects caused by climate change, the Russian economy may
be negatively affected by international climate restrictions. Thus, the European
86 Y. V. Mishalchenko et al.

Union’s fight against greenhouse gas emissions will lead to losses in the real sector
of the Russian economy in the amount of about US$2 billion per year (Figures et al.,
2021; Bashmakov et al., 2021). That is why Russia is interested in resolving climate
safety issues at the international level.

Materials and Methods

It should be noted that the causes of ongoing climate change do not have an
unambiguous interpretation. A number of scientists convincingly prove that these
reasons are provoked by natural causes, others, on the contrary, put human activity at
the forefront.
Regardless of the causes of climate change, these processes are of an objective
nature that requires taking into account climate change data in the implementation of
various programs for the development of national economies.
The methodological basis for the research was the dialectical method of studying
social and legal phenomena. In addition to the above, functional, logical and system
methods, as well as the modeling method, were used in the framework of this study.
Moreover, a comparative legal method was used to analyze national legal acts
regulating various issues of climate safety.
Thus, in the Russian Federation there is a comprehensive federal law “On
Environmental Protection” that resolves issues related to the preservation of the
natural environment, the protection of natural objects from negative anthropogenic
impacts and the protection of human health. This law combines economic interests
related to the development of various industries and ensuring the environmental
rights of Russian citizens by limiting the economic impact of man on nature in order
to ensure a favorable state of the environment.
In addition to the named legal act in Russia, there are other regulatory legal acts
aimed at preserving the environment. For example, there is a federal law “On the
Protection of Atmospheric Air” that established legal criteria for the protection of
atmospheric air. The Federal Law “On Production and Consumption Wastes”
determines the procedure for processing industrial and other wastes in order to
prevent their harmful effects on human health and the environment, as well as the
use of such wastes in economic circulation.
In order to protect the rights of citizens to a favorable environment, the Federal
Law “On Ecological Expertise” was adopted that provides for the assessment of
environmental risks from the planned economic activity.
In the United States a number of legislative acts, including the Endangered
Species Act, the Safe Drinking Water Act and others, have developed state mech-
anisms to protect the environment from negative anthropogenic impacts.
The European Union countries successfully apply the European system of green-
house gas emissions trading. The essence of this system boils down to the fact that
first, at the EU level, the annual volume of emissions that is distributed among
various sectors of European industry is determined. If the enterprise does not have
International Legal and Economic Aspects of Ensuring Energy and. . . 87

enough allocated quota, it can get the required volume on arm’s length terms (Boute,
2013).
At the same time, until similar measures to reduce carbon emissions are applied at
enterprises located outside the European Union, the efforts of the EU countries to
struggle against global warming will not be sufficiently effective. Theoretically, this
problem should be solved by the mechanism of cross-border carbon regulation
proposed by European states that creates equal conditions for both manufacturers
operating in the territory of the EU countries and enterprises of other countries,
ensuring in these countries a gradual transition to new environmental production
methods and building modern management models (Shalkov et al., 2021).
Thus, this mechanism will be a global instrument of European environmental
policy to reduce greenhouse gas emissions and improve the environmental situation
that will ensure non-discriminatory access to European markets for products
manufactured in different countries (Lazard & Youngs, 2021).
A comparative analysis of the above regulations allowed the authors to formulate
proposals for ensuring energy and climate safety at the global level.

Results

In the Russian Federation, as in many other countries, increased attention was paid to
reducing greenhouse gas emissions as part of countering climate change. It was
within the framework of this strategy that the Russian Federation and the countries of
the European Union consistently participated in the Kyoto Protocol and the Paris
Agreement.
At the same time, given the seriousness of the threat from the climate change
consequences, it must be recognized that the efforts of individual states or regional
unions will be insufficient.
It is necessary to create an independent supranational global climate management
system within which the issues of reducing greenhouse gas emissions and energy
safety will be comprehensively solved. This climate management system should
have a clear hierarchical structure, headed by a special international body created
within the UN. The powers of this body should be determined on the basis of
international law. Carrying out its activities, the specified management body should
rely on the national structures in the field of climate safety created in each state.
Undoubtedly, for the effective work of the said international body, it is necessary to
empower it with supranational powers in the field of ensuring climate safety. The
obligations of national states to fulfill the imperative commands of the said interna-
tional body should be organically implemented in the national legisla-tion. Taking
into account the complexity and variety of solutions to issues in the field of climate
safety, this body should use a project-oriented management system in its activities.
Within the framework of this management system, it is necessary to comprehen-
sively tackle three major issues:
88 Y. V. Mishalchenko et al.

1. Ensure energy safety

2. Reduce greenhouse gases
3. Adapt to climate change.
In view of the significant threats from climate change for the national economies of
various states, the international community should not be limited to national pro-
grams that partially solve environmental problems at the national or regional level,
but should develop a universally binding global climate management system aimed
at technical innovations development in all countries leading to a reduction in
greenhouse gases emissions.

Discussion

To solve the above problems, it seems reasonable to initially focus on energy safety
issues.
At present, the lack of a unified global strategy for the use of energy resources
leads to a shortage of certain types of energy resources and, as a result, an increase in
prices for this energy resource, and nullifies previously reached international agree-
ments on the phase-out of fossil fuels. In this regard, the above-mentioned interna-
tional body in the field of climate safety needs to develop a mandatory system for the
redistribution of energy resources. Within the framework of this system, the leading
countries of the world must sign the World Energy Pact that in the long term
guarantees the supply of certain natural resources (gas, electricity) in fixed volumes
from the countries supplying these resources to the countries consuming them. At
the same time, the size of market trade in these resources should be limited and
carried out on over-limit obligations. In fact, it is possible to talk about the formation
of the World Energy Union within which the distribution of the natural resources of
the planet will be carried out. Long-term fixed contracts will be of interest to both
producers of natural resources and their consumers. With the stabilization of prices
for these resources, it is possible to develop long-term programs to reduce the use of
fossil fuels and the transition to renewable energy sources. The surplus not covered
by the limit obligations can be sold on the free international market. Undoubtedly,
this union must have a supranational organizational mechanism of governance that
limits national sovereignty in the energy sector.
As part of solving the problem of reducing greenhouse gases, it is necessary to
form a global market for the distribution of labor results on the basis of the
successfully functioning above-mentioned system of distribution of energy
resources, taking into account climatic and other socio-economic factors. Within
the framework of this market, an interdependent system of labor results sale and
exchange with elements of directive global management functions. For example, the
Russian Federation supplies steel products, petrochemical products, and so on to the
specified global market, and receives automotive products, machine tools, micro-
electronics, etc. This system, operating on a global scale, will ensure the rational use
International Legal and Economic Aspects of Ensuring Energy and. . . 89

of natural resources, the distribution of labor resources and the solution of envi-
ronmental problems, since a number of production capacities can be eliminated that
will positively affect the ecology of the planet. The interdependence of suppliers
from each other will allow this system to work efficiently and avoid escalation
between individual countries. For the right to operate in this market, nation states
will be forced to accept global international trade rules and partially limit their
sovereignty for the unhindered movement of goods and services.
As part of solving the third problem, it seems expedient to develop a concept for
the human resources use based on scientific forecasts of climate change. In partic-
ular, it is possible to ensure in advance phased resettlement of the population from
territories that will suffer from climate change to more favorable areas, to ensure the
training of the most demanded specialists taking into account the needs of the
economy in labor resources and to plan in advance the necessary expenses of
national states for the social welfare of people who will be unclaimed by the created
global economy.
Unfortunately, now we see only attempts by the European Union countries and a
number of other states to solve emerging climate problems at the level of national or
regional legislation (Bauen, 2006).
At a meeting held on July 9–10, 2021 in Venice, G-20 finance ministers agreed on
the need for international cooperation to manage greenhouse gas emissions and
struggle against climate change.
The decision on the phased introduction of the International Carbon Regulation
Mechanism will provide the principle of legal certainty for companies outside the
EU and give time for these organizations to prepare for the corresponding payments
(Proedrou, 2018).
As the Cross-Border Carbon Regulation Mechanism enters into force, there will
be a phased reduction in the free allowances that are currently allocated to a number
of industries until they are completely eliminated by 2035.
At this stage, the Cross-Border Carbon Regulation Mechanism will only regulate
direct greenhouse gas emissions that occur in the production of relevant goods. As
the transition period ends, the European Commission will decide whether to extend
the scope of the mechanism to more goods and services.
To ensure the correctness of the information provided on carbon emissions,
manufacturers from third countries will provide the required information to
EU-registered importers, and if this information is not available, importers will use
standard greenhouse gas emission values to determine the amount of purchased
certificates.
At the moment, the European Green Deal provides for the allocation of more than
1.8 trillion euros to create a highly efficient and competitive economy in the EU
countries capable of ensuring the absence of direct greenhouse gas emissions
by 2050.
The authors believe that the solution of climate safety issues at the level of
regional state associations is unproductive, since it is necessary to develop and
implement global standards.
90 Y. V. Mishalchenko et al.

Since climate change is a global problem of mankind, it is necessary to pursue a

unified environmental policy not only in the EU countries, but also in states that are
not members of the European Union. Otherwise, there is a risk that carbon-intensive
production will be shifted outside the European Union, or goods made in the EU will
become less competitive compared to goods made in countries with lower environ-
mental requirements.
At the same time, it should be taken into account that energy safety is achieved by
ensuring the redundancy of energy supply sources that, accordingly, within the
framework of the Carbon Mechanism, will stimulate a decrease in the use of fossil
fuels, which will make it possible to influence climate change (Khlopov, 2021). In
particular, in the first quarter of 2020, global energy demand decreased by 3.8%,
which clearly demonstrates that the economic demand for various energy sources is
declining unevenly (IEA, 2020).
In November 2021, the work of the International Conference on Climate Change
in Glasgow (UK) ended. Within the framework of this Conference the national
delegations of many states outlined a common strategy to overcome the climate
crisis on the planet.
This Сonference ended with the Glasgow Climate Pact adoption, within which a
decision was made to gradually reduce carbon dioxide emissions on the planet by
45% by 2030 relative to the levels of emissions that were in 2010 and to achieve
carbon neutrality by 2050 (Cohen et al., 2022).
In addition to this main document, the participants of the Сlimate Сonference in
Glasgow adopted an agreement to reduce methane emissions by 30% by 2030, an
agreement to reduce the use of coal, under which developed countries plan to
abandon coal energy by 2030, developing countries by 2040. A number of countries
have set shorter deadlines for phasing out coal, in particular the UK, which plans to
phase out coal by 2024 (Van Den Berg et al., 2022).
Also, the most important document signed, including by the Russian Federation,
is an agreement on the protection of forests, within the framework of which it is
planned to allocate US$12 billion for the protection and restoration of forests. In
general, the international agreements fixed in Glasgow can keep the processes of
global warming within the limits of up to 2 °C (Meinshausen et al., 2022).

Conclusion

As it can be clearly seen, unresolved issues related to ensuring climate safety have a
significant impact on the world economy and require the adoption of comprehensive
urgent measures for legal and economic regulation and restructuring of global
international institutions at the international level (Engelbrekt, 2016).
As a solution to these problems, it seems appropriate to create a special interna-
tional body in the field of climate safety under the UN, whose main task is to develop
a comprehensive international treaty to ensure global environmental safety. At the
International Legal and Economic Aspects of Ensuring Energy and. . . 91

same time, it seems necessary to strengthen the role of the UN Security Council
(Dröge, 2020).
The authors’ model for ensuring energy and climate safety at the supranational
level involves the creation of a specialized international body whose activities will
be aimed at ensuring climate safety by issuing binding directives in the field of
energy resources distribution at the global level, distribution of orders in the
manufacturing sector in different countries depending on the environmental situation
in these states and their place in the created global system of labor division. Taking
into account the volume of powers transferred to the specified body, it is necessary to
ensure control over its activities by the UN Security Council that could cancel or
change the decision of this body in disputable situations. All countries that sign an
international agreement obliging them to comply with the directives of this body can
participate in the work of this body. As the number of countries joining this
agreement expends, the role of this body will rise that will increase its authority
and capabilities in global climate safety. Over time, countries that do not participate
in the work of this body will seek to join its work on any terms, since they will
receive both guaranteed orders for their industry and energy resources at fixed prices
established by this body.
The activities of this international body in the future may lead to the creation of an
international ecological union that will contribute to the economic prosperity of the
participants in this association. Within the framework of this association, it is
possible to develop uniform regulatory standards that will take into account the
interests of the parties as much as possible.
In the context of the complication of international economic conditions, relevant
mechanisms between the states to prevent and promptly ensure global climate safety
will inevitably be created.
The creation in the future of supranational integration associations in the climate
sphere will make it possible to create a legal international mechanism that ensures
the participation of all states in the preservation of the planet and ensuring carbon
neutrality already in this century.

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Conditions for the Formation of Sustainable
Energy in Kazakhstan

Zoya Gelmanova, Anastassiya Mezentseva, Ylia Valeeva ,

and Asem Aldabaeva

Introduction

Most of the electricity generated in the world is produced by fossil fuel power plants.
These energy resources are generally expensive, scarce, exhaustible, polluting and
unreliable because not all countries are endowed with primary resources, which is a
source of energy instability, while the burning of fossil fuels generates greenhouse
gases such as carbon dioxide, sulfur dioxide, nitrous oxide, which are the main
causes of global warming, threatening the very existence of mankind. This concern
is the main motivation for the transition to sustainable energy, through increased use
of renewable and low-carbon clean energy sources, especially solar, wind, biomass,
hydro and nuclear power. These renewable and low-carbon sources improve and
expand energy supply, improve long-term access and utility in energy production,
reduce dependence on fossil fuels, and reduce greenhouse gas emissions. There are
two challenges on the path to a sustainable energy future: access to energy and
mitigation of global warming by controlling greenhouse gas emissions (Rathor &
Saxena, 2020; Nguyen et al., 2020). For energy sources and systems to contribute to
sustainable development, they must have the following characteristics: energy
resources and systems are sustainable if they are renewable or permanent in nature;
a sustainable energy system should not be wasteful, but should be efficiently
produced and used with a minimum waste of resources; sustainable energy and
energy systems must be economically and financially viable; energy is sustainable if
its source is safe and diverse; sustainable energy and energy systems should be
equitable or easily accessible, accessible and affordable; sustainable energy

Z. Gelmanova · A. Mezentseva · A. Aldabaeva

Karaganda Industrial University, Temirtau, Kazakhstan
Y. Valeeva (✉)
Kazan State Power Engineering University, Kazan, Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 93

A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_10
94 Z. Gelmanova et al.

development should have positive social impacts; sustainable energy should be

associated with minimal environmental impact (Kolagar et al., 2020). Sustainable
energy refers to the generation and supply of electricity in a manner that does not
compromise the ability of future generations to meet their own energy or electricity
needs (Hollaway, 2013). It can also be defined as sources of energy that do not
deplete during the time relevant to humanity, and therefore contribute to the sus-
tainability of all species (Lund, 2010).
Sustainable energy, like sustainable development, requires significant changes in
how things are done and in what we do that affects industrial, manufacturing, social
infrastructure and value systems. The development of clean energy will solve many
problems of sustainable development (Kabeyi & Oludolapo, 2020; Kabeyi &
Olanrewaju, 2021, 2022). Sustainability today is of great concern as a direct result
of serious concerns about climate change, of which electricity generation is an
important factor (Vine, 2019). Electricity is a critical product necessary for sustain-
ing life, prosperity and global sustainable development (Berga, 2016).
Currently, humanity faces a serious challenge to implement the new Sustainable
Development Goals (SDGs) by 2030 (Berga, 2016; Kabeyi & Olanrewaju, 2020).
Sustainable development and its relationship with energy became a major global
issue and an issue at the World Summit on Sustainable Development in Johannes-
burg in 2002 (CS-UNIDO, 2008). Determining the most suitable energy systems in
the electricity mix is considered a strategic approach to the implementation of
sustainable development (Kabeyi & Olanrewaju, 2020; Ebrahimi & Rahmani,
2019). Power generation systems can be assessed using a five-dimensional approach,
including environmental, economic, social, technical and political sustainability, as a
reliable indicator of energy sustainability (Ebrahimi & Rahmani, 2019). Thus,
sustainability in energy development is aimed at achieving technical sustainability,
political sustainability, social sustainability, environmental sustainability and eco-
nomic sustainability, which is largely realized through the development and use of
renewable energy sources (Kabeyi et al., 2020).
The technical sustainability of electricity generation refers to the ability to safely
and efficiently meet current and future demand using clean energy sources and
technologies (Kabeyi et al., 2020). Environmental sustainability is related to the
integrity of the natural environment and its ability to remain sustainable and pro-
ductive in support of humanity (Kolagar et al., 2020). Environmental sustainability
is also related to the integrity and carrying capacity of the natural environment to
sustain humanity as a waste sink and source of raw materials (Mensah, 2019). Thus,
the environment or ecological dimension of sustainability is related to the preserva-
tion of the environment and habitats, especially from the impact of waste disposal,
overconsumption of the Earth’s resources and greenhouse gas emissions.
The economic dimension of energy sustainability is related to the viability of
individuals and organizations, products and services in energy or electricity produc-
tion and consumption, distribution and interaction. Economic sustainability aims to
maintain operational stability in terms of liquidity and cash flows and provide fair or
reasonable returns and benefits to investors and other stakeholders in energy systems
(Dyllick & Hockerts, 2002).
Conditions for the Formation of Sustainable Energy in Kazakhstan 95

Social sustainability is associated with the rights of the community, measured by

the level of social recognition and access of people to energy resources and systems
(Iddrisu & Bhattacharyya, 2015). Social sustainability is the ability to maintain
desirable social values, institutions, traditions and social characteristics of a society
before and after a project or intervention. It also deals with social justice and
therefore touches on aspects such as labor practices, differences in production
standards and the promotion of justice among all people (Kabeyi, 2018, 2019a,
2019c).
The purpose of the study is to provide researchers with a theoretical overview that
identifies the steps needed to create a sustainable energy environment in Kazakhstan.
The political dimension of energy sustainability is related to the management and
transformation of sustainable energy at all levels. This is achieved through the
development and implementation of policies and regulations involving various
political institutions influencing management choices (Kuzemko et al., 2016). This
means that the political dimension of energy sustainability is related to the strategic
planning and definition of the energy system and its associated systems and pro-
cesses. Thus, political stability issues relate to the future structure and indicate some
problems with the political stability and foreign policy of the energy system (Kabeyi,
2020).
The scientific novelty lies in the development of a methodology for the conditions
for the formation of sustainable energy based on the principles and criteria for the
selection and priority development of renewable energy sources, based on: theoret-
ical and practical implementation of the provisions of sustainable energy.

Materials and Methods

This article uses the methods of systematic literary review and analysis, general
scientific methods, such as systematization, generalization, concretization, synthesis,
analysis.
The study adopted a secondary method of data collection and analysis based on
recent primary and secondary data found in initial study results and reports from
peer-reviewed sources. For this study, the term “primary data” refers to data obtained
and conducted and presented in the form of peer-reviewed academic and profes-
sional articles (Kabeyi, 2019b, 2019c; Krzywda et al., 2021). The study is structured
in a sustainable energy transition shaping solution that combines scenario modeling
with policy development that is characterized by core and external parameters.
96 Z. Gelmanova et al.

Results

On the way to a sustainable energy future, there are two challenges: access to energy
and mitigation of the effects of global warming by controlling greenhouse gas
emissions (Kaygusuz, 2012). Energy is at the center of several Sustainable Devel-
opment Goals. These include expanding access to electricity, improving clean
cooking fuels, limiting pollution, and reducing wasteful energy subsidies. Goal
7, also known as SDG 7, aims to ensure access to reliable, affordable and modern
energy sources for all by the end of the next decade (IEA, 2018). The global adoption
of specific sustainable development goals in the field of energy has become an
important milestone towards a more sustainable and equitable society. While energy
should be at the center of efforts to put the world on a more sustainable path, current
and planned policies fall far short of achieving the critical energy-related sustainable
development goals. On a positive note, huge progress has been made towards
universal access to electricity (SDG 7.1.1) for Asia and parts of sub-Saharan Africa
(IEA, 2018).
The Republic of Kazakhstan has a real chance to use its competitive advantage,
significant export and transit potential in the construction of the Kazakhstan Smart
Energy System with a deep analysis of integration solutions (Gelmanova et al.,
2015). The results of numerical modeling of the scenario of Kazakhstan’s confident
entry into the top 30 most developed countries with the simultaneous fulfillment of
international requirements and requirements for the implementation of the Concept
for the transition of the Republic of Kazakhstan to a “green economy” are presented
in Table 1 (Strategy 2050, 2013).
The key aspect is that a significant increase in generating capacity should be
carried out at the expense of clean and safe energy, which imposes significant
obligations on the preparation of relevant projects. For these purposes, a master
plan for the development of the electric power industry until 2030 has been devel-
oped, which offers real measures to respond to all global challenges (USAID

Table 1 Numerical simulation of the confident entry scenario Kazakhstan among the 30 most
developed countries
Energy- Consumed
GDP/ Nase capacity electro- Enough-och. You
person leniya GDP GDP energy power throws
(thousand (mln. (billion (million (billion generation CO2
Year $) pers.) $) t. AD) kWh) (GW) (t/person)
2014 14.84 17.33 257.22 76.30 97.34 19.82 12.46
2017 17.67 17.83 315.17 76.16 107.65 21.92 9.69
2020 20.46 18.34 375.35 71.26 113.63 23.14 7.89
2030 33.33 20.16 672.03 102.76 182.59 37.18 4.166
2040 49.33 22.50 1109.78 124.67 258.11 52.63 3.86
2045 55.82 23.76 1326.20 125.19 283.11 57.65 3.86
2050 63.15 25.10 1584.8 123.64 307.57 62.63 3.86
Conditions for the Formation of Sustainable Energy in Kazakhstan 97

Table 2 Target indicators of Kazakhstan

2020 2030 2050
Share alternative sources energy (with taking into Sunny and 30% 50%
account wind, solar, hydro and atomic energy) windmill—not (where 10%
less 3% share RES)
Gasification regions Akmola and Northern and
Karaganda Eastern regions
region
Reduction level choice owls greenhouse gases 15% reduction
from 1990 level

Regional Energy of the Future Program, 2020). The main idea of strategic decisions
is the position of N.A. Nazarbayev, set out in the book “Global energy—ecological
strategy for sustainable development in the 21st century”: in search of “the optimal
solution to energy-ecological problems, all methods should be used, starting from
consumption optimization and increasing the efficiency of energy saving, through
innovative development renewable and alternative energy sources to the creation of
fundamentally new energy technologies” (Nazarbayev, 2011). The Green Economy
Concept (2013) sets specific targets for the energy sector in Kazakhstan. Fulfillment
of obligations under the Paris Climate Agreement sets tasks for additional goals
aimed at reducing greenhouse gas emissions, which are presented in Table 2
(USAID Regional Energy of the Future Program, 2020).
Plans to expand the gas network. The assumptions were made on the basis of the
Concept for the Development of the Gas Sector until 2030 and the Feasibility Study
for the Sary-Arka Gas Pipeline Construction Project. Estimated terms of gasification
by regions: Almolinsk region—2024; Karaganda region—2024; North
Kazakhstan—2026; Pavlodar region—2032; In the East Kazakhstan region, it is
not planned until 2024. The limitation of gas for the energy sector is 7.2 billion m3
until 2030. Annual increase in gas consumption by 2.2% from 2031. The Interna-
tional Energy Agency states that the share of natural gas has increased from 16.2% of
consumption in 1973 to 23.1%. In 2019 the share of nuclear power increased from
0.9% to 5%, while the share of hydropower increased from 1.8 to 2.5% of the total
primary energy consumption (IEA, 2021). Three strategic sites were proposed for
the construction of the NPP: Ulken—a site near Lake Balkhash, availability of water
supply, necessary infrastructure for laying the foundation of the NPP; Kurchatov—a
good location in terms of connection with Russia, the Irtysh River also flows nearby;
Aktau is a site close to a water supply, but located in the western part of the country,
which is currently isolated from the rest of the EAC zones. The transformation of the
structure of generating capacities in 2013, 2030, as well as the structure of strategi-
cally safe and satisfying the conditions of sustainable energy installed capacities in
2050 is shown in Table 3 (Strategy 2050, 2013).
According to the data presented in Table 3, the development of thermal power
plants will be carried out on the basis of a gradual transition to environmentally
friendly coal technologies (according to the National Program for the Development
of Coal Energy), the development of hydropower will mainly be carried out on the
98 Z. Gelmanova et al.

Table 3 Structure of generating capacities in 2013, 2030 and 2050

Installed Installed Grade cost drip— Installed
power in power in nyh costs in period power in
2013 G., 2030 G, 2013i–2030 2050 G.,
Type of generating power MW MW (billion $) MW
HPPs, including small hydro- 2090 3700 ≈0.9 5200
electric power station
Thermal power plants standard 16,910 10,520 0 4000
Thermal power plants with 0 13,060 ≈22.4 17,000
application CCS—technologies
Nuclear power plants or thermal 0 2000 ≈4.0 10,000
power plants with application
CCS technologies
Wind power, total ≤95 4000 ≈7.0 8000
Photovoltaics and solar ≤95 1000 ≈2.6 3000
concentrators
Bioenergy 0 3000 ≈9.1 7000
Geothermal energy and wind 0 500 1000
energy with taking into account
thermal energy
Total 19,180 37,280 ≈46.6 52,200

basis of large and small hydroelectric power plants, wind energy will be develop in
the following areas: large wind farms included in national energy networks; territo-
rial wind farms included in regional networks; secluded low-power wind turbines for
powering single objects. Solar energy is developing as a high-tech direction of
sustainable energy with a wide range of applications both for generating electrical
and thermal energy, and for creating devices for remote control of energy generation
and use processes. The formation of bioenergy and the development of bioeconomy
is carried out in conjunction with such problems as the production of organic
fertilizers, the production of effective feed additives for animals through the use of
cake after pressing oil for biofuel, and the cost-effective development of unused
agricultural areas. Geothermal energy will be formed through a closed system of
water use, hydrogen—through the creation of systems for generating hydrogen at
thermal stations, the development of the production of fuel cells for use in complex
power plants, the development of the use of hydrogen fuel for vehicles. The
formation of nuclear energy is aimed at ensuring uninterrupted power supply to
large consumers with the highest rates of economic development, replacing capac-
ities during unstable periods when generating energy with renewable energy sources
included in the NPG, forming a network of autonomous energy sources to ensure the
supply of water for irrigation, creating a powerful generation system hydrogen.
Nuclear power plants are being created with small and medium capacity, mainly in
a closed cycle, with a gradual transition to uranium-thorium reactors.
The sustainable energy scenario for Kazakhstan is given in Table 4 (Strategy
2050, 2013).
Conditions for the Formation of Sustainable Energy in Kazakhstan 99

Table 4 Macroeconomic scenario and development of sustainable energy

2013–2017 2018–2023 2024–2030 2031–2040 2041–2050
Economy Growth rate of GDP per capita not lower in %
6 6.4 6.4 4 2.5
Energy By 2017 By 2022 By 2030 By 2040 By 2050
Productivity of generating capacities at the point of consumption up to the
level enough to grow the economy to:
2022 2030 2040 2050 2060
At a rate not lower than % per year
6.4 4 2.5
Energy— By 2017 By 2020 By 2030 By 2040 By 2050
capacity Decline energy intensity before level:
0.9 0.8 0.7 0.6 0.5
From 2012 level
Ecology Decrease level CO2 emissions
Middle- up to 8.3 t/ on forecast not above not above
world person 4.2 t/ 3.86 t/ 2.8 t/
person person person

Table 5 Range costs major funds new energy

View power plants Cost 58 GW capacity (billion $)
Hydroelectric power station 29b-58
Nuclear power station 116
TPP (on corner) 75
TPP (on coal with UHU—tech.) 94–107
TPP (on gas) 63.8
Wind turbine 58–145
Sunny energy 58–240
Small HPPs 58–69.6
Mini CHP 34.8
CHP 81.2–87
Power station on biofuels 100–200

An analysis of investments in the economy of Kazakhstan shows that it is

possible to focus on the criterion of the maximum possible costs for the formation
of sustainable energy at the level of 1% of the gross product on a cumulative basis.
The choice of an economically justified ratio between the capacities of certain
types of electricity generation is calculated on the basis of current prices. The amount
of financial resources for the complete replacement of 58 GW of power with a given
type energy sources is presented in Table 5 (Strategy 2050, 2013).
The following circumstances are fundamental: the cost of fixed assets of the new
energy sector does not exceed the economic security limit of 299.7 billion dollars at
the current price scale; broad prospects are opening up for the use of coal in an
environmentally friendly mode, which is strategically important for Kazakhstan for
100 Z. Gelmanova et al.

reserving oil and gas for future generations; the service life of generating capacities
is comparable to the implementation period.
Strategies for sustainable energy until 2050, including: thermal power plants—
the full designated life of the power unit and the main equipment included in it at the
level of 40 years, nuclear power plants—up to 50 years without renovation, wind
turbines—15–20 years without renovation, solar panels—35–40 years. If we take a
limit of 1% as the target, then more than 100 billion US dollars will be generated for
the implementation of such strategically important areas as: the development of
industry in the field of sustainable energy formation, including export, the modern-
ization of the basic transmission and distribution networks of electricity, the mod-
ernization and technological re-equipment of heat supply systems, renovation and
renewal of fixed assets of new energy. The sustainable energy strategy of Kazakh-
stan is being implemented in two stages with control intermediate points (Strategy
2050, 2013). Stage I—2013–2030, milestones—2017 and 2023; Stage II 2031—
2050, checkpoint—2040. At checkpoints, in accordance with internal and external
circumstances, the main parameters and target parameters of development of
Kazakhstan external to the strategy are checked and analyzed in order to correct
actions until the next time point. In the period up to 2030, the dynamics of structural
transformations in the energy sector is determined by four circumstances: the
readiness of the state and society for technological transformations in the energy
sector; choice of “radical” or “moderate” scenarios; regional policy in the field of
energy sufficiency; the pace at which the renewable energy production industry is
being created; the volume of planned expenditures for transformations in the energy
sector, including in the field of energy efficiency. The parameters at the end of the
stages are given in Table 6 (Strategy 2050, 2013).
In order for the Strategy to become a nationwide reality, a Sustainable Energy
Roadmap of Kazakhstan is needed, as a visual representation of a step-by-step
scenario for the formation and development of an environmentally safe and eco-
nomically attractive energy sector. In order to consolidate the Kazakh society and
foreign partners, the Roadmap should reflect the principles and mechanisms for their
practical implementation, which are presented in Table 7 (Strategy 2050, 2013).
The national practice of the Industrialization Roadmap is fully adequate to the
project approach. The contours of the images of the gradual transformation of the
energy, economic, environmental and social future of Kazakhstan at a qualitative
level should become the first main component of the Sustainable Energy Roadmap.
Fossil fuels accounted for 61% of global electricity production in 2020, while
nuclear, wind and solar power accounted for 35% of global electricity production
this year. Solar energy also surpassed oil in global electricity production in 2020,
where solar energy accounted for 3.2% compared to oil, which accounted for 2.8%
of global electricity production in 2020 (World Energy Data, 2022). Solar energy is
cheap because the cost of solar energy is usually negligible beyond the initial cost.
The operating costs of solar energy are also significantly lower than those of
conventional power plants. Solar energy is an important source of energy security
because it is available locally. The energy security provided by solar power makes a
country less susceptible to external disruptions or events that could affect supply or
Conditions for the Formation of Sustainable Energy in Kazakhstan 101

Table 6 Main and external target parameters sustainable energy strategies of Kazakhstan
Main parameters In 2030 In 2050
Volume consumed electricity 200 ± 5 bln. kWh 300 ± 5 bln. kWh
Power major funds energy 37 ± 2 GW 55 ± 5 GW
Share renewable sources in consumption energy, Over 33% Over 51%
including hydropower
CO2 emissions on soul population Not above 7.5 ton Not above 3.9 tons
people per year per people in year
Volume reservations oil for future generations 2 billion tons 2 billion tons
Probable reserves recoverable on the
basis of available and predicted
technologies
Volume capital investment, total 47 billion $ 300 billion $
in 2012 prices in 2012 prices
Term sufficiency on current energy for realizations Subsequent 10 years after acceptance
10 summer plans development Kazakhstan and him everyone 10 year old plan
regions
Growth tariffs behind check formation sustainable AT average not more how on 21$ in
energy month in recalculation on soul population
in prices 2012 G with selective politics
on specific payments
External parameters
Growth gross product on soul population 2.8 times 5.3 times
Attitude energy intensity units gross product in 2050 0.65 0.5
G. to relevant meaning in 2012 G.
Growth population Up to 20 million Up to 25 million
human human

Table 7 Principles and mechanisms of implementation sustainable energy strategies

Principle Mechanism implementation
Principle energy sufficiency Reasonable and public tariff politician.
Principle motivation Practice formation open for participation
National industrial—innovative clusters “wind
power”, “Sunny energy”, «Bienergetics and
bioeconomics» and further extension practices
creation national, regional and international
clusters in energy-ecological sphere.
Principle publicity measures Platform G—Global and publication registry
successfully past energy and environmental
expertise programs and projects.
Principle project foot approach Turning on projects in Road cards industriali-
zation Kazakhstan and him regions.
Principle clear and public accounting and res- Implementation energy-ecological expertise
ervations for future generation at relatives balance primary energy resources needed for
energy resources internal use and needs external consumers on
period before 2030 G. and on perspective
before 2050 G.
102 Z. Gelmanova et al.

cost. Socially and economically, the production of solar energy creates employment
opportunities, for example, in 2018. The solar photovoltaic industry has provided
more than 3.6 million jobs worldwide (Solarin et al., 2021). The main problem faced
by solar energy is the inconstancy and interruptions in the supply of electricity, as
well as the relatively low efficiency of electricity conversion.

Discussion

The main environmental advantage of nuclear power is that greenhouse gas emis-
sions during the life cycle, including emissions from uranium mining and
processing, are close to emissions from renewable energy sources (IPCC, 2014).
In addition, its land requirement per unit of power output is less than that of
mainstream renewables, and it does not pollute the local environment. Although
uranium ore is a non-renewable resource, available quantities of it could provide
electricity for hundreds and thousands of years to come. Thus, the wider use of
nuclear energy will reduce emissions and the associated impact on the environment
(IPCC, 2014) (Table 8).
As part of the implementation of the innovative development program of Kazakh-
stan, the modernization program of the electric power complex of the Republic of
Kazakhstan and the Green Village international project, which is supervised by the
United Nations, in the Almaty region (in the village of Sarybulak, Almaty region) at
the end of June 2012, a solar power plant was put into operation. The object, worth
580 thousand dollars, has been built since 2010 under an agreement between
Kazakhstan and the Republic of Korea on grant funds from foreign partners (Statista,
2022).
The construction was organized by the akimat of the Almaty region, Dostyk—
energo JSC, the South Korean corporation Daisung energy and the KIOCA energy

Table 8 Total system costs under baseline scenarios without NPP and with NPP, as part of the
development of the energy industry (USAID Regional Energy of the Future Program, 2020)
Base scenario
General system ic costs $ Base scenario without nuclear power Base nuclear power
million plant scenario
TPP CAPEX 8.110 18.752
RES CAPEX 9.455 5.358
TES fix. OPEX 20.489 21.559
RES fix. OPEX 7.254 5.457
TPP OPEX variables 5.176 5.268
RES OPEX variables 571 571
(hydro)
Price fuel 10.009 8.828
Expenses on CAPEX lines 1.214 1.486
Total 62.278 67.279
Conditions for the Formation of Sustainable Energy in Kazakhstan 103

agency. The power plant consists of six 20-m solar panels that store solar energy.
The solar power plant covers an area of 1 ha. The design capacity of the alternative
generating company exceeds 52 kWh of electricity. Only two people, local residents,
operate the installation who have been trained in Korea.
Thanks to the appearance of a solar power plant in the village, it became possible
to drill wells in order to obtain artesian water. Today, drinking water comes from a
depth of 130 m. According to the inhabitants of the village, their well-being and
consumer level have recently increased markedly. The local population began to
actively purchase refrigerators, televisions and other household appliances.
At present, the commissioning of solar installations with a total capacity of
91 MW is envisaged, mainly in the Almaty region. At the same time, practical
measures are being taken in Kazakhstan aimed at creating a production base that
produces silicon and photovoltaic cells necessary for the development of solar
energy.
The basis for the implementation of the KAZPV project—on the creation and
development of silicon solar energy in Kazakhstan is the presence in the bowels of
Kazakhstan of huge reserves of high-purity quartz. From the French side, the
development and implementation of the project was entrusted to the Commissariat
for Atomic Energy and Alternative Energy Sources, from the Kazakh side—to
Kazatomprom. In solar energy, the main material is pure silicon, from which solar
cells are made. A big shift in recent years can also be called the growth of use in solar
panels, mainly in the production of polycrystalline silicon (polysilicon). The share of
this sector in consumption has grown from 3% of global demand for silicon in the
mid-2000s to 12%. Continued strong growth in the use of silicon in solar panels is
expected to lead to growth of the silicon market by more than 10% per year. The
amount of silicon used in solar PV modules is expected to approach the amount of
silicon consumed in traditional silicon markets within a few years. Project scope:
Plant for the production of photovoltaic panels in Astana and Ust-Kamenogorsk,
with a capacity of 60 MW with the possibility of increasing up to 100 MW based on
quartz from the Sarykolskoye deposit. All products manufactured by the enterprise
are planned to be exported. The quality of technical silicon fully complies with the
requirements of GOST 2169-95, which is used at the enterprise (Information on the
KazPV project). An analysis of the world market for technical silicon and silicon
products shows that there is a significant demand for silicon products and their
further processing. Reaching the design capacity of the existing Kazakh enterprise
will contribute to the formation of a high-tech silicon cluster in the country, which
will accordingly affect the growth of production and exports of manufacturing
products, employment of the population and improvement of its standard of living
both in the context of the region and throughout the country. The main types of raw
materials and materials at the enterprise include quartz, coal and charcoal, special
coke, birch chips and carbon or graphite electrodes, Table 9 (Business plan of
«TauKen LLP Temir», 2014).
Kazakhstan has huge reserves of deposits of quartz raw materials. According to
the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan, there
are 12 quartzite deposits, 20 rock crystal and optical quartz deposits on the state
104 Z. Gelmanova et al.

Table 9 The security of the enterprise for the main types of raw materials and materials, taking into
account the operation of 1 furnace
Volume
View raw purchases A country
materials etc. Provider supplier Conditions supplies
Electro- By request LLP «Ekibastuz GRES – Kazakhstan On constant basis
energy one them. B. Nurzhanov»
Woody 6320 LLP Kazakhstan Semiannual contracts
coal «PromTechProgress» with the possibility
Electrodes 1488 Company «Energoprom Russia prolongation
coal Novosibirsk electrode
plant»
Wood 13,020 LLP «Uglezhozh» Kazakhstan
chips birch
Quartz 36,000 LLP «Mining-Industrial Kazakhstan
transport company»
Special 3360 LLP «Komyr – Kuat» Kazakhstan
cox
Stone coal 9360 Prommetz LLP Kazakhstan

balance, in terms of purity and reserves of which Kazakhstan is second only to Brazil
and Madagascar (recognized leaders in the supply of quartz to the silicon market). Of
the 20 quartz deposits, 17 are located in Central Kazakhstan, in the Ulytau-
Zhezkazgan region.
According to preliminary estimates of domestic experts, the balance of the
Republic currently has about 65 million tons of high-quality quartz and 267 million
tons of quartzites used for silicon production. The raw material base of the Kara-
ganda metallurgical plant for the production of silicon is represented by deposits of
veined quartz Aktas and Akshoky-3, located in the Karaganda region.
The Aktas field is located in the Zhezdinsky district of the Zhezkazgan region,
60 km west of the Zhezdy railway station. Opened in 1950. In terms of
morphostructural features and productivity, the Northern flank, Central part and
Southern flank are distinguished in the field. The scope of the project is regional.
The implementation of the project will create conditions for the development of the
country’s silicon industry by attracting direct investment in the sub-sector and
facilitating the export of products to the world market.

Conclusion

Thus, sustainable energy is socially justified; gradually turns the energy sector into a
type of systemic activity inscribed in the socio-economic development of the
country. The strategic guidelines for development, the main requirements for sus-
tainable energy, for the confident entry of Kazakhstan into the ranks of the 30 most
developed countries have been determined. The formation of sustainable energy will
Conditions for the Formation of Sustainable Energy in Kazakhstan 105

significantly increase the competitiveness of the economy of Kazakhstan, the quality

of life of people and improve the environmental and resource situation in the
country.
Specific energy projects affect the economic, social and environmental aspects of
the sustainable development of a country or region. Renewable energy projects use
local rural labor, businesses, local materials and businesses, local investors and other
services. Thus, renewable energy revenues are invested back into local communities
in the form of taxes, payments for materials and labor, and returns for investors that
leave more economic benefits than imported fossil fuels or imported electricity.
Sustainable development cannot be achieved without sustainable energy that pro-
motes sustainable electricity generation. While sustainable development can be
analyzed along three dimensions representing the three pillars of sustainable devel-
opment, namely economic, social and environmental dimensions, sustainable energy
is best analyzed along five dimensions, namely environmental, economic, social,
technical and political sustainability, which can be used to develop and analyze
energy sustainability measures.

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AgeTech Innovations as an Instrument
for Older Population Inclusion

Natalia N. Shestakova , Mikhail G. Djanelidze ,

and Margarita B. Skvortsova

Introduction

The share of older people in the global population is steadily growing. According to
WHO forecasts, by 2030, 1.4 billion people aged 60 and older will live in the world,
and by 2050–2.1 billion (which is twice as much as in 2017) (World Health
Organization, 2022a). This huge increase in the number of elderly people creates
an urgent problem of creating a favorable environment for them based on the
development of retirement, medical and social security, care systems, transportation,
housing and urban planning (World Health Organization, 2022b).
In March 2021, the World Economic Forum published a report entitled “Ageing:
Looming Crisis or Booming Opportunity?” (World Economic Forum, 2021).
Indeed, an aging society faces, on the one hand, a number of economic problems
associated with an increase in social and dependent burdens, but on the other hand, a
new growing market of products and services is emerging for the aging population
and those who serve it with a potentially high return on investment in it.

Materials and Methods

Silver economy is the system of production, distribution and consumption of goods

and services aimed at using the purchasing potential of older and ageing people and
satisfying their consumption, living and health needs. Current article discusses the

N. N. Shestakova (✉) · M. G. Djanelidze · M. B. Skvortsova

Institute for Regional Economic Studies Russian Academy of Science, St. Petersburg, Russian
Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 109
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_11
110 N. N. Shestakova et al.

issue of silver economy with particular focus on investigating the potential social
and economic value of AgeTech promotion.
The research purpose was to comprehensively study the theoretical and practical
possibilities of increasing the inclusiveness of the economy for older people through
the development of AgeTech innovations. The authors attempted to analyze the role
and prospects for the development of AgeTech innovations as an element and stage
of the formation of the silver economy.
The objectives of the study included: identification, justification and clarification
of opportunities and prospects for increasing the inclusiveness of the economy
through the development of the AgeTech innovation sector.
The methodological basis of the study was the scientific approaches of institu-
tional and evolutionary economics, methods of comparative and sociological anal-
ysis, historical and systemic approaches. The institutional approach made it possible
to identify the directions and targets for the development of an inclusive economy,
and the evolutionary approach and comparative analysis to outline the prospects and
directions for increasing the inclusiveness of the economy based on AgeTech
innovations.
The theoretical foundation of the article is silver economy conception, based on
Russian and foreign researcher’s studies (for example Shestakova et al., 2022). A set
of theoretical and practical methods was used in the study, in particular: literature
review, data collection, development of theoretical foundations and economic anal-
ysis of the prospects for the development of the AgeTech segment of the silver
economy for the Russian Federation. Economic and social analyses made by
authors, utilize the achievements of sociological and economic studies and based
both on existing science literatures and the statistical data.
With the help of general scientific analytical and synthetic methods, domestic and
foreign scientific publications, as well as statistical and Internet sources, the theo-
retical and practice-oriented aspects of the stated problem were studied. The use of
scientific publications and statistical materials ensures the reliability of the
conducted research.

Results

The term AgeTech refers to goods, technologies and services created for the elderly
population and optimized for use by the people over 60–65 years old since the need
for funds related to the AgeTech category increases sharply at this age stage. But, in
addition, the development of assistive innovative technologies (AgeTech) is a new
instrument for better inclusion of the older citizens in the life of society.
There is a widespread perception that technologies created for an aging popula-
tion are only such specific products as LifeAlert (“Help! I fell and I can’t get up”) or
electric stair lifts. In fact, the range of AgeTech products is much more diverse—it
includes a wide range of technologies, goods and services for the increasingly
differentiated needs of the elderly population. AgeTech products specially designed
AgeTech Innovations as an Instrument for Older Population Inclusion 111

for the elderly include tablets, smartphones, computers, banking interfaces, medical
monitoring and notification systems, etc.
There are numerous economic, social and psychological problems associated
with the situation of older people in society, which urgently require the search for
measures to solve them. In economic and social aspects, they are caused by:
• social isolation,
• insufficient pension and financial security,
• ageist ideas about aging and the elderly,
• age discrimination in the labor market,
• ageism in the professional sphere,
• quality of medical care,
• availability of social assistance,
• an environment of vital activity that contributes to the preservation of activity,
• lack of goods and services adapted for them.
Various tools developed by AgeTech contribute to solving many of them.
Accordingly, according to the authors, the entire range of goods and services
provided to the elderly population can be divided according to at least three criteria.
AgeTechMarkets/Macro Industries of AgeTech:
• technologies (goods and services) for the elderly themselves,
• technologies for their caregivers,
• biotechnological/pharmaceutical products.
Spheres of life of the elderly population:
• the sphere of work;
• sphere of communication;
• the sphere of leisure;
• the sphere of medical care, disease prevention and rehabilitation;
• the sphere of social protection and assistance/support;
• banking and financial sphere.
AgeTech development areas:
• medicine,
• bionics,
• electronics,
• info-communication technologies,
• design, etc.
Let’s consider the prospects for the development of AgeTech in some of the
designated spheres of life.
AgeTech innovations in the field of labor have great potential in terms of
lengthening the working period of a person, both through automation/robotization
processes that reduce the requirements for human physical capabilities, and through
the use of technologies that provide sensory and cognitive support. This is an
important factor, because, according to the international consulting company
112 N. N. Shestakova et al.

BCG, by 2050 the share of 50+ workers among the working-age population will be
30% (in 2010 this figure did not exceed 10%). And according to forecasts, in the next
10 years, 65+ employees will account for slightly more than half (52%) of the
increase in labor resources.
The expansion of the older peopledigital activities, educational programs and
courses for the older population in various areas (including its online formats),
platform employment open up new opportunities for their professional self-
realization in old age and can potentially become an additional source of labor
and, accordingly, economic growth.
As noted in the report of the European Parliament, the main area that will flourish
in a world full of the elderly is medicine. Eric Spiegel, President and CEO of
Siemens USA, believes that the aging of the population increases interest in
health-related innovations. “As the population gets older, we should invest more
in the prevention, early detection and treatment of all serious diseases, such as
diabetes, dementia and Alzheimer’s disease, cardiac diseases or cancer” (Wolfe,
2014). Accordingly, most of AgeTechproducts are related to healthcare. And this is
natural—after all, people aged 55 and older account for more than half of the total
health care costs (Ortaliza et al., 2021).—therefore, technologies created for this
population group necessarily include medical products and services.
The increasing coverage of the elderly population by info-communication tech-
nologies and the growth of their digital literacy provides new opportunities both in
terms of their service and bridging the digital divide by creating applications adapted
for them.
But despite the narrowing of the digital divide, the number of digital products
specifically designed for the elderly remains small. Karen Etkin, in her book “The
AgeTech Revolution”, writes that most of the currently available technologies are
not aimed at older people as users, despite the fact that they have great purchasing
potential (in the USA—approx. authors) (Etkin, 2022). In general, as the digital
divide narrows and people’s dependence on technology increases, companies that
develop products and services tailored to the needs of older people are getting good
opportunities for growth.
New types of financial products and investment strategies for pensioners are
emerging. In developed countries, special fintech products for the elderly are
becoming widespread, including new types of savings accounts, specialized pension
plans and financial counseling. Unfortunately, these directions will not be relevant
for the majority of Russian pensioners yet.
Since the share of older generations in the population is getting larger, and the
elderly themselves are becoming more proficient in modern digital technologies, the
demand for AgeTech products is growing, and the market is still not enough
products and services designed for them, then we can talk about the presence of a
set of conditions for the growth of this sector of the silver economy. AgeTech is a
rapidly growing field, and there is no sign that its growth will slow down as demand
will grow both in the coming years and in more distant periods.
The analysis of AgeTech clearly distinguishes between industries related to the
daily life of the elderly today and biotechnological industries, research in which is
AgeTech Innovations as an Instrument for Older Population Inclusion 113

related to the study of the fundamental mechanisms of aging and attempts to develop
innovative technologies to influence them in the future. Currently, in the field of
biotechnology, there is an active search for means that can slow down the aging
process: attempts are being made to create new medicines and/or combinations of
them to combat aging. Potentially, these areas are associated with the possibility of a
radical change in the mechanisms of aging and, it is possible to assume with a high
degree of probability that breakthrough technologies will appear there in the future.
The prospects for the development of biotechnologies are grandiose, but more
distant in time. And since today the volume of venture investments in the field of
AgeTech devices, computer and Internet and media applications is significantly
higher than investments in biotechnology, it is AgeTech that still retains the palm
both in its social significance and from an economic point of view. The practical
results of the rapid development of AgeTech are already evident today and our
article is dedicated to them.

Discussion

There are many innovative developments in the world, focused both on the needs of
the aging population and facilitating the care of the part of it that needs it. Already
today, there are many products, services and solutions aimed at an aging population.
The number of startups working in this direction is constantly increasing; AgeTech
industries are also showing active and steady growth.
Thus, according to experts, the volume of the global market of AgeTech products
(goods and services) will increase to reach $2 trillion in the near future (Newman,
2019). According to other estimates, the global technology market for older ages has
grown by 21% annually and will reach $2.7 trillion by 2025 (Colangelo, 2019). And
according to the estimates of Generator Ventures (a venture company specializing in
investments in AgeTech startups aimed at creating innovative technological prod-
ucts designed for elderly population), the “longevity economy”, defined by them as
the sum of all economic activity serving the needs of Americans over 50, currently
amounts to $7.1 trillion, and by 2032 its volume will exceed $13.5 trillion. Despite
the differences in estimates associated with differences in methodological
approaches and age gradations of the population taken into account, nevertheless,
both forecasts indicate the prospects and potential growth rates of the market of
goods and services for the older population.
It should be noted that this growth is due to several jointly acting trends:
• steady and continuing to increase aging of society (in three aspects: an increase in
life expectancy; a decrease in the birth rate in countries that have gone through a
demographic transition; an increase in the proportion of the elderly population in
the population);
• the intensification of social and economic problems associated with aging and
growth in this regard, the need to solve them;
114 N. N. Shestakova et al.

• rapid development of innovative AgeTech technologies;

• high level of investment in research, development and implementation of
AgeTech technologies;
• expanding the spectrum of AgeTech development, in particular, the allocation of
such areas as:
– the formation of an accessible environment at the micro- (“smart home”),
meso- (urban—urbanism) and macro—(transport, travel, recreation, hospital-
ity industry) levels;
– technical support of “aging in place”.
It is obvious that the parties interested in promoting AgeTech are not only the
elderly themselves, but also caregivers, representatives of social services and
healthcare organizations, manufacturers of goods and service providers, investors,
entrepreneurs, insurers and other actors.
Currently, AgeTech’s dominant industry is healthcare, but specialized technolo-
gies for the elderly are gradually coming to the real estate, finance, fitness, online
communities, entertainment and many others. And the stratum of elderly people is
heterogeneous—their needs and preferences are different.
It should also be noted that the progress of digitalization provides huge opportu-
nities for combining various technologies, increasing their functionality through
integration and generating new types of AgeTech products and industries. Accord-
ingly, we can talk about such a trend in the development of AgeTech as the
integration on a platform basis of various sectors and disparate systems related to
the lives of older people. Digital technologies allow integrating information about a
person, the situation in which he is and his condition. The use of AgeTech technol-
ogies using computers, smartphones, and wearable gadgets allows remote monitor-
ing of a person’s condition (his location, body position, health), providing
interaction with the healthcare system in real time in the future. Platform solutions
are also being developed that combine offers of a full range of offers for the elderly
and care services.
Let’s define two target aspects of AgeTech development:
• improving the quality of life of the aging population,
• solving economic and social problems related to the aging of society.
However, the current existence of two independent directions of AgeTech
development—technologies adapted to the needs of the active part of the aging
population, and tools to improve social and medical care for people in need of it—
determines the division of the modern AgeTech market into two different segments:
• segment focused directly on the needs of the older population;
• segment of goods and services related to the care of the elderly.
At the same time, the second direction is connected with the development of platforms
that allow collecting and analyzing medical information and other data that give an
idea of the location, position and condition of elderly clients. This provides opportu-
nities for monitoring both their condition (monitoring medical indicators) and
assessing their daily activity (nutrition, body position, physical activity, etc.).
AgeTech Innovations as an Instrument for Older Population Inclusion 115

Such AgeTech monitoring is one of the promising directions for the development
of personalized medicine—the collection of individual medical data based on the use
of web applications and wearable medical gadgets in real time expands the possi-
bilities of not only treatment, but also prevention (and also, and this is the main
preference for older ages—it allows you to dramatically increase the efficiency of
medical care in emergency conditions). Such monitoring data can be provided to
both doctors and emergency services, as well as family members, as well as persons
caring for an elderly person in real time.
The World Health Organization operates with the concept of “aging in place”.
According to the WHO definition, aging in place means the ability to lead a safe,
independent and comfortable lifestyle in your home and community, regardless of
age, income or level of viability (World Health Organization, 2016). Generator
Ventures notes that according to the survey results, 92% of older people would
prefer to grow old on the spot.
And the mission of AgeTech development is to improve the quality of life of the
aging population, allowing elderly people to safely age in their own chosen condi-
tions, while maintaining cognitive, emotional and physical well-being. Therefore,
housing is one of the most important areas of application of AgeTech innovations in
terms of implementing the concept of a “smart home” – expanding its functions
based on high-tech support for an aging person.
The defining criterion of healthy aging (the concepts of “active aging”, “inde-
pendent aging”, “successful aging” are almost synonymous with it) is the preserva-
tion of independence by an elderly person, allowing aging on the spot. At the same
time, innovations and technologies are increasingly seen as key areas for creating an
environment of healthy aging—aging on the spot is increasingly associated with
digital technologies to ensure the safety and independence of elderly people living
alone and independently at home.
In an article by Dalmer et al., it is noted that aging in place is a social, economic
and political goal, with the achievement of which a person continues to live in his
home and postpones moving to a care facility for as long as possible. It also
emphasizes that “with changing demographics and geographically dispersed fami-
lies, technologies in the home are being promoted as providing greater autonomy
and security for ‘at-risk’ elderly people as they age” (Dalmer et al., 2022). In this
context, AgeTech acts not only as a new technology developed specifically for the
elderly, but as a factor in the formation of an environment that expands the
possibilities of independent aging.
Today, the demand for smart homes for the elderly is increasing in the world.
Smart homes, using AgeTech products and services, allow people to grow old on the
spot, staying in their own homes, even when they need help and care—and these
opportunities are expanding every year. The Internet of Things has connected the
physical and digital worlds, and one of the direct by-products of this has been the
emergence of wearable devices. As connectivity between the physical and digital
worlds expands, opportunities in the field of wearables will only increase, especially
in the field of AgeTech.
116 N. N. Shestakova et al.

Smart home technologies are a set of monitoring sensors and digital information
exchange devices that monitor daily activities, noting deviations from the norm.
Unlike 50-year-old emergency call devices, modern on-site aging technologies use
artificial intelligence to detect abnormalities in activity, body position, behavior and
vital signs. The use of wearable sensors and cloud technologies allows you to
provide real-time feedback on a person’s condition, activity, heart rate, breathing
and body movements. This information is shared with adult children of the elderly
and/or care providers and emergency services.
Let’s take a short tour of the modern Russian segment of AgeTech, since Russia is
one of the countries that have undergone a demographic transition, and its popula-
tion structure is also characterized by a steadily growing proportion of the population
of older age groups. This demographic shift reinforces the existing and creates new
problems for national social, pension and health care systems - from ensuring
economic sustainability in the face of increasing dependency burden to increasing
health care costs and the need to provide assistance to an aging population with a
shortage of caregivers.
At the same time, the largest increase in labor resources in the Russian labor
market is expected precisely at the expense of a group of older workers, which is one
of the consequences of the “demographic pit” generation entering the labor market.
And in this situation, the expansion of digital activity of older people not only
expands the field for their employment, but also opens up new opportunities for their
professional self-realization with age.
In this regard, it can be noted that in our country there is a positive trend in the
proportion of the population of older age groups with digital skills that allow, among
other things, to perform their work functions in a remote format. Thus, according to
the HSE, the daily Internet audience is expanding mainly at the expense of older
people: if among people aged 35–44 years, the share of daily users in 2019 was
85.7% (+20.3 percentage points by 2018), at the age of 45–54 years—74.7% (+27.3
percentage points), then at the age of 55–64 years—49.9% (+23.8 percentage
points), at the age of 65–74 years—22.9% (+13.1 percentage points)
(Abdrakhmanova et al., 2021).
However, according to experts, the segment of domestic AgeTech products in the
field of info-communication technologies turns out to be practically empty—spe-
cialized products for older ages are practically absent, and existing devices and
applications are not focused on the needs of the elderly and are not adapted for use
by them.
At the same time, in the field of social protection and assistance/support for older
citizens of the Russian Federation, service platforms based on AgeTech products
have appeared and are functioning. These include:
successfully functioning mobile application “Social Navigator” (launched in 2018
by the Social Insurance Fund of the Russian Federation),
the transfer of a number of functions of the Ministry of Labor and Social Protection
of the Russian Federation, the Pension Fund of the Russian Federation, the Social
Insurance Fund of the Russian Federation, as well as institutions of medical and
AgeTech Innovations as an Instrument for Older Population Inclusion 117

social expertise and employment services and services provided by them to the
population in an online format, implementation within the framework of the
Concept of digital and functional transformation of the social sphere (2021) of
a set of projects “Strategic direction in the field of digital transformation of the
social sphere”, including the following subprojects: “Unified centralized digital
platform in the social sphere”, “Unified Contact Center for interaction with
citizens”, “Electronic personnel document management” and “Modernization of
the civil service employment of the population”) (Government of the Russian
Federation, 2021).
launch of virtual assistants for public and city services platforms;
the transition to the “Social Treasury” model (completion of the project is planned in
2024) on the basis of a single digital platform that includes information systems
and databases of the Pension Fund, the Ministry of Labor, the Social Insurance
Fund and institutions of medical and social expertise. Subsequently, it is planned
to gradually transfer the assignments of all social support measures to this
platform. The federal State Information system (EGISSO) is supposed to be
connected to the platform as part of a unified digital platform.
It should be noted that interest in digital social services is shown not only by
government agencies, but also by private business. So, currently there are 22.5
thousand digital startups in the database of the Internet Initiatives Development
Fund (IIDF), and an increasing number of them are focused on providing social
services (for example, the Life Button project, created for emergency communica-
tion with the elderly and children (supports 40,000 clients), the Surdo Online
project—sign language translation for the deaf using video communication).
Experts identify the following promising market niches in the Russian AgeTech
segment (Goryunov, 2021):
• IT solutions and services for finding nurses, nurses, cleaners, es-corts. It is
advisable to create platforms for the organization of cohabitation;
• IT solutions for the comfort and safety of the elderly (robot assistants, voice
reminders, security buttons, emergency video sensors, location detection, infor-
mation support services, etc.);
• health monitoring technologies (portable cardiocomplexes, devices for laboratory
diagnostics (measurement of sugar, saturation), evaluation of other indicators
with the ability to send information to a doctor, relatives, call for medical care at
critical values);
• gadgets and software for the elderly (smartphones, tablets, programs with a
simplified interface and minimal required functionality, large font, one-button
communication, voice control);
• adaptive and bio-responsive, smart clothes and shoes, among other things using
high-tech technologies and built-in gadgets.
• online education services, organization of events and leisure activities that allow
the elderly to master a wide range of new competencies and contribute to
overcoming social isolation.
118 N. N. Shestakova et al.

Considering the silver economy more broadly—as a whole set of industries focused
on the older consumers (Presidential Grants Fund, 2018), it is possible to predict the
formation of a significant number of new intensively growing economic sectors. So,
judging by the analytical forecasts of the EU, it can be expected that these areas will
include:
• connected healthcare, which is a variety of smartphone-based devices and mobile
healthcare services (for obtaining online prescriptions and health-related software
applications);
• robotics based on artificial intelligence helps aging people to be independent in
their daily lives (while implemented at the level of developing applications for
smartphones and games), is a potential way to improve the social life of the
elderly;
• integrated care combining ICT solutions for monitoring and maintaining the
health of elderly people in their homes and apartments (there is a strong industrial
base in this sector in European countries);
• smart home technology that provides comfort and convenience to the elderly.
Home automation, including home robotics (domotica), complemented by
connected healthcare as part of an integrated care model. It is focused on
lengthening the period of independence;
• wearable technologies (smart watches, fitness trackers, smart clothes and glasses,
medical devices and infotainment gadgets) that also contribute to the active and
healthy lifestyle of the older population;
• self-driving cars (fully or partially autonomous vehicles) that implement auton-
omous vehicle technologies and assistive technologies. Make it easier to drive a
car for the elderly;
• interactive platforms, which allows to form communication plat-forms for inter-
action on the provision of services/assistance to young and elderly citizens in
problematic areas;
• communication technologies;
• digital investment tools (including pension);
• digital banking.
Obviously, all the above positions relate to the AgeTech sector of the economy. At
the same time, assessing the future development of the AgeTech market, it is
important to understand and take into account the current trend of transition from
a perspective focused on healthcare and social services to a demographic
perspective—the formation of an adequate response to the current and expected
needs of the elderly.

Conclusion

Thus, the above allows us to draw the following conclusions.

AgeTech Innovations as an Instrument for Older Population Inclusion 119

One of the options (vectors) for anticipating the negative consequences of aging
is the development and implementation of high technologies in the interests of
citizens of older age groups. This thesis fully fits into the conclusion reached by
the experts of the international non-governmental organization
HelpAgeInternational. Policy measures “to meet the needs of older people should
be complemented by active efforts to adapt society to the demographic transition and
build a society for all ages, as stipulated in the MIPAA (UN, 2002). Persistent
measures throughout the life cycle and measures to unite generations should provide
a proactive direction in the policy on aging. A proactive approach is necessary to
reduce the negative effects of population aging and to use the potential of a mature
society.
The world must be provided with a clear vision and practical tools to adapt to the
demographic transition. In fact, the policy of aging should be replaced by a policy of
longevity” (Sidorenko, 2022).
The results of comparative analysis of the AgeTech silver economy segment
development in countries with a socially oriented economy allowed us to determine
the conditions for its promotion in the Russian Federation.
The directions of further research are related to the search for opportunities and
development of mechanisms to increase the economy inclusiveness based on
AgeTech innovations. The analysis of the stages of the formation of the silver
economy and the prerequisites for the emergence of the AgeTech innovation seg-
ment allows us to outline the prospects for its development.
According to our research it is possible to predict further differentiation of this
segment, connected both with the processes of digitalization of the economy and
with the emergence of new assistive technologies in the AgeTech segment.
Another area of further research is the assessment of the impact of digital
transformation as a tool for increasing the inclusiveness of the economy. Also
promising from both the theoretical and practice-oriented side is the study of the
potential impact of AgeTech innovations not only on the inclusiveness of the
economy, but also on increasing its sustainability.

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www.who.int/initiatives/decade-of-healthy-ageing
ESG Concept of Growth in the Outlines
of Real and Financial Institutions

Elena Ivleva , Elena Sintsova , and Nina Shashina

Introduction

1. The institutional outlines of environmental concepts are constantly changing and

are the subject of research in many scientific papers (Baikov et al., 2020;
Burgonov et al., 2020; Evmenov et al., 2019; Morunova et al., 2018; Okrepilov
et al., 2020; Ritman et al., 2017). The fundamentalism of the sustainable devel-
opment concept determines the global nature of the tasks to be solved within the
framework of social, economic and environmental transformations. The level of
transformation processes determines the assessment of the result in summarizing
indicators of the gross, regional, environmentally adapted product (Vlasova et al.,
2016, Kuzmina et al., 2019, Okrepilov et al., 2019a, b).
The theory finds further refinement in the concept of smart, sustainable and
inclusive growth, when institutional and mental factors additionally fall into the
task area. Like the concept of sustainable development, the concept of smart,
sustainable and inclusive growth is not the result of research from a particular
school of thought, representing a practical document of EU action in 2020. The
level of transformation processes and assessment of eco-efficiency is macro- and
mega economic. However, it should be emphasized that the concept also includes
some nanoeconomic aspects of economic, environmental and institutional human
formation. It is the assessment of the transformation qualitative parameters that
confirms the problem of simultaneously solving economic, social and

E. Ivleva · E. Sintsova (✉)

Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
N. Shashina
Saint-Petersburg Electrotechnical University “LETI”, St. Petersburg, Russian Federation
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 121
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_12
122 E. Ivleva et al.

environmental tasks. New opportunities to achieve balance in the social, ecolog-

ical and economic sphere are represented by digitalization factors (Okrepilov
et al., 2019a, b; Sintsova & Vitsko, 2020), innovation factors, and the knowledge
factor (Kuzmina et al., 2019; Okrepilov et al., 2021). Within the framework of the
Economic Safety Institute, ESG development factors are considered at the micro,
meso, macro and mega levels of economic research (Zaytsev et al., 2021; Ivleva
et al., 2016, Burgonov et al., 2019).
The ESG growth concept makes it possible to evaluate the effectiveness of
government actions, the effectiveness of specific management decisions at all
levels of the economy, including nano, micro, meso, macro and mega levels. The
level of eco-efficiency is connected with the ESG transformation of financial
markets, banks, insurance companies, other financial institutions, the redistribu-
tion of financial flows in the interests of companies with an ESG policy, and the
development of ESG risk management system. Green bonds, social bonds,
sustainable development bonds, loans linked to sustainable development goals,
loans for green projects become ESG transformation tools. ESG derivatives can
be climate-linked, such as in agriculture or logging. The instruments of ESG
ratings are interesting, but there are limitations. They are the low coverage of ESG
ratings, as in the Russian Federation there are no more than 100 companies. In
addition, the methodology of rating agencies differs, there is no unity of
approaches. ESG ratings are not enough to assess the risks of business projects.
In this case, a financial adviser’s report is required. From the point of view of the
economic theory, there are sources of ESG risks throughout the entire value
chain.
The circular economy model clarifies the direction of production efficiency
within the full and repeated use of raw materials and residuals of the production
process, and to a lesser extent, the compensation of accumulated damage. Circu-
lation tools and strategies are changing towards expansion, from 3R (reduce,
reuse, recycle) to 6R (reduce, reuse, recycle, recover, redesign, remanufacture)
and 9R (reduce, reuse, recycle, recover, refurbish, remanufacture, repurpose,
repair, rethink, refuse). The level of problem research is outlined by micro and
macro research. The instrument system development should take into account not
only the sectors of secondary raw materials processing, by-products production
and waste disposal. In this case, the processes of land reclamation and lost forest
restoration fall out of the in-depth analysis. The 3R, 6R and 9R instrument system
does not include development tools for the institute of recooperators. There are
about 181 recooperators in the Russian Federation, five of them work in the “red
zone”. The so-called “hybrid instruments” of green finance in this case include
the development of the institute of recooperators and financial intermediation and
a change in the ratio of debt and equity financing of green projects.
2. All studies are of interest not so much in terms of quantitative assessment of
economic growth as in assessing changes in its quality (Barajas et al., 2017;
Okrepilov et al., 2019a, b, 2021; Okrepilov & Gagulina, 2021a, b). In the system
of economic growth indicators it is the quantitative parameters of economic
growth rates, the level of economic development, and the standard of living
ESG Concept of Growth in the Outlines of Real and Financial Institutions 123

that are most applicable. However, ecological adaptation and focusing on ESG
criteria is identified in the system of indicators of quality of life. The ecosystem
quality of financial and non-financial services is growing as part of such changes,
which the authors consider in the focus of ESG changes. An example is banking
services that include waste reduction, waste recycling, energy savings, ESG
loans, ESG risks, ESG ratings. Within the securities market, it is the formation
of a green financing sector, ESG bonds, exchange-traded funds that comply with
ESG principles.

Materials and Methods

The study is carried out using methods of analysis and systematization. The authors
apply the content analysis method to identify problems and discussion points related
to the formation and development of the ESG growth concept. Within the content
analysis, the references do not include the papers of the authors of the article in full.
At the same time, publications in specialized economic journals containing different
approaches within the framework of the research problem are included.

Results

The study allows to lay down the following results:

• analysis of modern recurrent publications allows to state the formation and
development of the ESG growth model in the family of environmental concepts,
to fix controversial approaches in determining the role of economic, environmen-
tal and social factors in the concept of sustainable development and ESG factors
in the ESG growth concept;
• the institutional outlines of the ESG growth concept are defined by the transfor-
mational processes of the real and financial markets and are connected with the
emergence of institutions of recooperators, green banking, green insurance, green
financing;
• transformational processes in the real market are connected with the functioning
of technological entrepreneurship and the implementation of energy transition
tools, including green ones. In the long term, financial flows in the financial
market are redistributed in favor of companies with an ESG strategy.

Discussion

The study made it possible to pose two debatable problems:

124 E. Ivleva et al.

• at present, it is impossible to define the ESG growth concept as a mature,

independent model. It develops on the basis of the sustainable development
theory, within its institutional outlines and problems, which explains the similar-
ity of research approaches and interpretations;
• rare papers are devoted to the formation of a new ecosystem quality of the ESG
growth concept. Most of the studies are carried out in the framework of sustain-
able development using indicators of the quality of life system.

Conclusion

Summing up, the authors make several conclusions:

1. The ESG growth concept has been formed and is developing along with the well-
known environmental concepts: sustainable development, smart, sustainable and
inclusive growth, the circular economy.
2. The outlines of the ESG growth concept are defined by assessing the levels of
research into the problem of social, ecological and economic balance (nano,
micro, macro, meso, mega). In addition, the authors evaluate the system of factors
that determine ESG development: economic, social, environmental, institutional,
mental, knowledge factor, digitalization factor and others. The authors also
identify the levels of eco-efficiency, fixing the use of general or specific, quan-
titative and qualitative, financial and non-financial indicators.
3. Transformation processes are changing the institutions of the market and entre-
preneurship in two directions: improving the institutional infrastructure and ESG
focusing within the established institutions. The result of institutional changes is
the emergence and development of the institution of green entrepreneurship,
green banking, green investment, green financing, etc.

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Non-standard Green Buildings and Smart
Houses as Way to Get Additional Financial
Resources

Nataly Sergievskaya

Introduction

The relevance of this work. Nowadays some people prefer to live in extra-ordinary
houses that are highly comfortable and environmentally friendly. “Green” buildings
and “smart” houses meet such requirements. Another reason for some people to
choose these buildings is to reduce their cost of living. The smart houses and green
buildings can be preferable because they help to reduce utility costs by saving water
and electricity.
People get tired of monotony psychologically. Thus, their interest in
non-standard, extra-ordinary, comfortable and healthy housing grows. Investors
and developers try to meet the needs of potential buyers and prefer to invest in
building of such houses.
In recent decades non-standard buildings and structures start to attract more
attention of the people all over the world. Green construction makes housing
environmentally friendly. Smart houses create comfort.
The article reviews two hypothetical premium class hotels that contain compo-
nents of “green” buildings and “smart” houses. Before that, however, we would like
to present some definitions of these terms proposed by researchers in various
countries.
Construction of “green” buildings is “aimed at increase the efficiency of utiliza-
tion of resources (energy, water and materials). “Green” construction also reduces
the impact of buildings on human health and the environment during life cycles of
the buildings thanks to better choice of location, design, construction, operation,

N. Sergievskaya (✉)
Moscow State University of Civil Engineering (National Research University), Moscow,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 127
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_13
128 N. Sergievskaya

maintenance. It is necessary to design and operate “green” buildings to reduce the

overall impact of construction on the environment” (Abdullah et al., 2020).
Drew Liming in his article “Careers in Green Construction” notes that “green
construction is the practice of erecting buildings and applying environmentally
friendly and resource-efficient processes” (Liming, 2011).
“Smart” houses include an automation system that controls household appliances,
lighting, temperature and security, access control and alarm systems, etc. A “smart”
house requires a connection to Internet (Larsson & Hatzigeorgiou, 2022). “A
“smart” house is a group of devices connected to the Internet that can be controlled
using a smartphone or computer remotely” (Albany et al., 2022).

Materials and Methods

Theoretical analysis, comparison and generalization of data are used in the article.
Nowadays much attention is paid to the environmental challenges in many
countries, because they may adversely affect life and health of the people, their
capability to work, such as environmental challenges caused by air pollution, etc.
Below are the points of view of some researchers on the matter:
1. Prabhat Kumar Rai, Prashant Kumar Rai in their article “Environmental and
socio-economic impacts of global climate change: An overview on mitigation
approaches” state that nowadays the amount of natural resources and the quality
of the world environment has changed significantly due to the rapid pace of
industrialization and urbanization. . . . There may “increase of emissions and
accumulations such as of carbon dioxide (CO2), nitrogen (N20), methane
(CH4) and chlorofluorocarbons (CFCs) in the atmosphere. They are considered
the main greenhouse gases (GHGs)” (Rai & Rai, 2013).
2. Stefan Ambec and Jessica Coria write in their article “Policy spillovers in the
regulation of multiple pollutants” that “many air pollutants and greenhouse gases
(GHGs) have common sources. Cars and coal-fired power plants are cited as
examples. They emit nitrogen oxides (NOx) and carbon dioxide (CO2), which
have a negative impact on air quality and climate” (Ambec & Coria, 2018).
3. Shanjun Lia, Yanyan Liuc, Avralt-Od Purevjav, Lin Yan in their article “Does
subway expansion improve air quality?” informs that “traffic congestion and air
pollution cause serious problems in cities in many developing countries. . . . East
and South Asia countries (such as Bangladesh, China, India and others) experi-
enced the highest levels of PM2.5 in 2015. PM2.5 is the main environmental
factor of mortality.” (Li et al., 2019).
4. Lutz Sager writes in his article “Estimating the effect of air pollution on road
safety using atmospheric temperature inversions” that “Air pollution can cause
serious negative health effects, including respiratory disease and cardiovascular
disease. In addition, it can have negative impact on the behavior and labor
Non-standard Green Buildings and Smart Houses as Way to Get. . . 129

productivity of city residents . . .”. There is “data that shows a link between air
pollution and increased aggressiveness, more impatience, etc.” (Sager, 2019).
The Organization of Economic Cooperation and Development declares that nowa-
days there is a serious risk of losing flora and fauna from 61% to 72% by 2050
because of high level of consumption and production (Ivanova & Levchenko, 2017).
In the modern world, the construction of environmentally friendly houses con-
tributes to the protection of nature and the improvement of ecological situation.
Energy consumption for heating is reduced in “green” houses thanks to using of
internal heat sources of energy-saving and heat-insulating materials. These houses
are practically harmless from the point of view of ecology (Kablukova &
Ismagilova, 2016).
The concept of “green construction” was proposed at the United Nations Con-
ference on Environment and Development (UNCED) (Rio de Janeiro, 1992). It was
noted that buildings should provide comfortable conditions for residents and the
buildings must also save energy and reduce possible negative impact on the envi-
ronment (Rai & Rai, 2013).
Powell, Jennifer Baumert state in his article “Green Building Services” that
services of “green” construction include construction, architecture, engineering
and accompanying events which aim to form sustainable structures by means of
using of environmentally friendly technologies, processes and materials (Larsson &
Hatzigeorgiou, 2022).
Sheina S.G. and Minenko E.N. in their article “Green building as the basis of
sustainable development of urban areas” emphasize that nowadays “green” con-
struction is considered as:
• practices of construction and operation of buildings having lowest consumption
of energy and material resources during their entire life cycle, and
• “a new philosophy for the formation of comfortable internal (buildings) and
external (urban) environment” (Sheina & Minenko, 2015).
In modern world, an important task is to use the latest energy-saving and environ-
mentally friendly technologies. “Green” houses contribute to solving this problem.
Planting of greenery of facades and roofs is carried out for this. It is believed that
planting of greenery contributes to the absorption of dust, noise reduction, etc.
(Kornienko, 2017). Goals of “green construction” in Fig. 1.
In Table 1 are the following examples.
Important competitive advantages of the “green” buildings are: certification based
on green standards and considerable increase of energy efficiency (Sharipova &
Demina, 2016).
“Green value is the net value added of a building that is seen as “green” and more
attractive to a potential consumer. It is also believed that investing in “green”
buildings is very profitable, because it leads to quite serious financial return”
(Abdullah et al., 2020). This statement can be illustrated by an example based on
Moscow region in Russia shown in Fig. 2.
130 N. Sergievskaya

Saving electricity and other

resources during the life
cycle of the buildings

Minimising adverse impact of Maintaining quality of

buildings on humab health buildings

Goals of
green
houses
Minimising adverse impact on Higher quality of buildings
the environment

Improved comfort inside

the buildings

Fig. 1 Goals of “green construction” (Sharipova & Demina, 2016)

Table 1 Advantages of “green” buildings (Sharipova & Demina, 2016)

Name Terrain Advantages
Business center Moscow The energy consumption of the green building has been
“Dukat place III” reduced by approximately 35%.
Project FREEDOM Moscow The estimated level of energy consumption of the green
region buildings is 35 kWh/m2 per year, which is 5 times less than
standard rate for Russia.

Average Annual Maintanance Cost by Building Type

1620 USD/m2

240 USD/m2

Traditional "Green"

Fig. 2 Comparison of average annual maintenance costs of the traditional and “green” buildings
(Kablukova & Ismagilova, 2016)

Figure 2 shows that operating and maintenance costs of a “green” building are
much lower than those of the traditional building. The difference in our example is
equivalent to US$ 1380 per m2. Comparative advantages of “green” buildings can be
clearly seen in Fig. 3.
The application of “green” building standards stimulates:
• innovative technologies,
• quality of life of the people,
• environmental situation in cities and towns, etc.
Non-standard Green Buildings and Smart Houses as Way to Get. . . 131

improvement of environmental situation

longer life cycle of the buildings

less water and energy consumption

lower maintenance costs

"green" business development

development of innovative environmentally friendly technologies

Advantages of green buildings

development of environmentally friendly economy

improvement of quality of life of the people and society

better air quality in the buldings

better environmental conditions in the offices and other facilities

cleaner buildings

better maintenance

higher quality of the internal environment

less exposure to allergens

less pollutants

improved health

Fig. 3 Advantages of “green” buildings (Allen et al., 2015; Khodadadzadeh, 2016; Sharipova &
Demina, 2016)

In many studies reviewed by us researchers agree that “green” buildings contribute

to more comfortable life of people in terms of ecology and energy efficiency. These
buildings have beneficial effect on health of the people and improve environmental
situation in cities and towns. There are elements that contribute to saving water or
reducing energy consumption in “green” buildings. Thanks to it, savings are made
by landlords and tenants (savings on utilities) (Kornienko, 2017).
Thus, the “green” construction helps to improve quality of life of the people by
improving the quality of “green” buildings and reducing consumption of energy
resources. “Green” construction contributes to the development of innovative tech-
nologies (Khodadadzadeh, 2016).
132 N. Sergievskaya

Fig. 4 Key Functions of a

“smart” house
Lighting
control

Sound and Clinate

video control

Smart
houses

Control of
kitchen Communic
and ation and
household internet
appliances

Technical
protection

Now let us move on to “smart” houses. “Smart house is an automatic system that
manages and controls all engineering networks in the house (electricity, heating,
ventilation and air conditioning, water supply, security).” It saves time and money of
inhabitants of such houses. The main advantage is energy saving. Thanks to a “smart
house”, it is possible to considerably save water and electricity resources
(Akulinushkina & Zaripova, 2019).
Thanks to “smart” houses, time for housekeeping can also be reduced, for
example smart dishwashers or robotic vacuum cleaners can be used. They prevent
wasting electricity, for example, “smart” lightbulbs turn off automatically if there is
no one in the room (Larsson & Hatzigeorgiou, 2022).
“Smart” houses can be managed by connecting the controlled equipment to the
special type of central device. The mechanisms are controlled through an interface,
which is usually use a wall terminal, computer, tablet, smartphone, etc.” (Larsson &
Hatzigeorgiou, 2022).
Key functions of a “smart” house are presented in Fig. 4.
Another advantage of “smart” houses is resistance to stresses. A person may start
to panic in a stressful situation that may be dangerous to health or even life of such
person. He will not be able to make reasonable decisions and control the situation.
While the “smart” technology is able to control the emergency situation. For
example, if there is a fire in a house, the fire extinguisher will automatically turn
on and fire fighters will be called.
However, there are also some disadvantages. For instance, fraudsters may enter
the house by hacking the “smart” house system in case it is not adequately secured.
Non-standard Green Buildings and Smart Houses as Way to Get. . . 133

Fig. 5 Economic benefits

from a “smart” house Smart house benefits
(Akulinushkina & Zaripova,
2019)
Cost saving Tine saving

Table 2 Comparative advantages of smart houses and green buildings

Advantages
“Smart” houses “Green” buildings
Time saving Longer life cycle
Less technical maintenance
Cost saving Improvement of the environmental situation
Less water and energy consumption
Development of innovative technologies
Better indoor air quality
Better maintenance
Better quality of the indoor environment
Less exposure to allergens
Health improvement
Less environmental pollutants

Apart from other the advantages of a “smart” house it is necessary to mention the
following benefits shown in Fig. 5.
Below is a comparison of advantages of “smart” houses and “green” buildings
(Table 2).
The above benefits may synergize by providing even higher advantages to the
users. For example, longer life cycle and/or less maintenance requirements help to
save time and costs.
We would like to demonstrate below the outcomes of several surveys conducted
by various companies with respect to smart houses and environmental issues in
Russia, Saudi Arabia and USA.
1. The project Hi-Tech design conducted a survey among 4620 Russian users under
the Hi-Tech project Mail.ru in July 2019 (Fig. 6).
2. Delta, the leading provider of comprehensive security services for real estate,
property and vehicles conducted a survey among respondents aged 20–65 years
in 6 federal districts of the Russian Federation (Fig. 7).
3. Survey conducted in Saudi Arabia: 270 “smart” homeowners were interviewed
(Albany et al., 2022) (Fig. 8).
Based on the outcomes of the above surveys it can be seen that majority of
respondents are aware of “smart” houses and some of them would like to have
them. However, most respondents preferred not to exceed their financial limits. A
relatively small proportion of respondents are willing to pay higher prices for
obtaining smart houses (24% in one survey and 18% in another survey). Only
134 N. Sergievskaya

Smart House Survey Results Conducted by

High-Tech Project

ready to pay for additional comfort much more 0.24

ready to pay for additional comfort within their
0.57
budget
would like to have a smart house 0.69

use smart houses technologies 0.27

aware about smart houses 0.88

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Fig. 6 Smart houses survey conducted by Hi-Tech in Russia

Smart House Survey Results Conducted by Delta

consider smart houses to be unsafe 5%

consider smart houses as unnecessary
luxury 6%
Have elements of the smart house 14%
Want to have a smart house regardless
of the price 18%
Prefer to have a smart home 57%

0% 10% 20% 30% 40% 50% 60%

Fig. 7 Smart houses survey conducted by Delta in Russia

27% of respondents of the first survey use “smart” house technologies, and 14%
of respondents of the second survey have “smart” house elements.
It may be assumed that such a small percentage of respondents use “smart”
house elements because the people believe that it is very expensive. In addition,
some people are wary and even negative about “smart” houses. They consider
“smart” houses as an unnecessary luxury (6%) and believe that they are not safe
(5%). There may be some truth in this point of view and the third survey
conducted in Saudi Arabia demonstrates that. Many people are unaware of how
their confidential information is stored and managed in the cloud. “Smart” houses
have their pros and cons and each person should decide whether to use “smart”
houses technologies or not.
4. The survey carried out by the NAFI Analytical Center in Russia in April–May
2019 was devoted to environmental situation in the cities, small towns and
Non-standard Green Buildings and Smart Houses as Way to Get. . . 135

Smart Building Disadvantages Survey Results

Respondents are not aware how their

confidential information is stored and 41%
managed in the cloud

Respondents do not trust the Cloud 72%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Fig. 8 Disadvantages of “smart” houses according to survey in Saudi Arabia (Albany et al., 2022)

Environmental Situation

unfavourable environmental situation in

71%
big cities
positive envirinmental situation in towns
62%
and settlements

Environmental situtation is unfavourable 48%

Environmental situation is favourable 50%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Fig. 9 Environmental situation

settlements. According to opinion of most respondents (71%) environmental

situation in the cities is not favorable, while in small towns and settlements is
seems to be better (62%). It may be expected, therefore, that the demand for
environmentally friendly green building and smart houses will grow faster in big
cities than in the small towns and settlements (Fig. 9).
5. The publication The Environmental Leader wrote about a survey conducted by
real estate company AMLI Residential. The company interviewed 2812 people
aged 25–34 in USA in various hotels located in Chicago, Dallas, Southeast
Florida, Atlanta, Seattle and others. The survey showed the following (Fig. 10):
All the above surveys show that the people living in various countries are
interested in having “green” and “smart” houses and some of them would like to
live in such houses.
136 N. Sergievskaya

Environmental Expectations

Importance of envirinmentally clean

85%
houses for health

Importance of envirinmentally clean

84%
houses for life

Respondents agree to pay some more

64%
for environmentally friendly house

0% 10%20% 30% 40% 50% 60%70% 80% 90%

Fig. 10 Environmental expectations of the respondents

Results

The scientific novelty is the following: the author proposes to combine features of
non-standard “green” buildings and “smart” houses in one hypothetical hotel and to
show the benefit of such combination not only for entrepreneurs, but also for the
region, and for the country. The author also proposes to use his own formulas both
for calculating the payback of hotels based on hypothetical costs the rooms, and for
estimation of the approximate cost of “smart” hotel elements.
As mentioned above, many people prefer non-standard, environmentally friendly
and comfortable houses. Advantages of their construction for the people, region and
the country is demonstrated on Fig. 11.
From our point of view, there is an interaction between the non-standard build-
ings’ concepts (“green” buildings, extraordinary buildings and “smart” houses) on
the country level, regional level and on the level of the people. They are related to
each other and interconnected.
“Green” buildings, “smart” houses and “extraordinary” buildings always arouse
the interest of the people in many countries. Extraordinary buildings are a great way
to attract tourists from all over the world. Accordingly, this provides an additional
inflow of capital and improve the image of the country. “Smart” houses attract
people by simplifying their routine activities and rising living standards and comfort.
They also help to save energy, save time and money. “Green” houses contribute to
improving the environmental situation and, therefore, improvement of the health of
the people. The population is becoming healthier, which has positive effect on the
region and the country. In addition, “green” houses also contribute to saving of
energy and other resources.
Below we would like to present our hypothetical combination of the above
non-standard buildings in one house: “green”, “extraordinary” buildings and
“smart” houses, prepared for the purpose of this article.
Non-standard Green Buildings and Smart Houses as Way to Get. . . 137

Construction Of Non-Standard Buildings

Green Buildings Extraordibary Buildings Smart Houses

Government
Improvement of Peoples' Improvement of Improvement of Living
Health Country's Image Standards

Region
Improvement of Attraction of Tourists Improvement of Living
Environmental Situation Standards

People
Improved Health Higher Standards And Energy Saving and
Image Comfort

Fig. 11 Advantages of non-standard buildings

Table 3 Comparison of two types of non-standard mini hotels

Option 1. Hotel for families with children Option 2. Extraordinary hotel
The hotel may be a fairy-tale house focused on It can be an extraordinary building for people
families with children. Everyone dreamed of who are tired of the standard environment.
staying in a little fairy-tale house in childhood at People who are not interested in traditional
least one time. hotels any longer and prefer something
With a properly conducted advertising cam- unusual, extraordinary. Specially designed
paign interested families with children may be tours and excursions may be offered focuses on
attracted and the construction costs may be the interests of the tourists. The hotel may
recouped relatively quickly. attract a certain category of people and may be
profitable. However, it will also require a spe-
cially designed advertising campaign.

Below is a comparative analysis of two options of hypothetical non-standard mini

hotels with 10 rooms.
Option 1—a fairy-tale hotel for families with children to be built based on the
standard design.
Option II—an extraordinary hotel to be built on a specially developed unique
design (Table 3).
Option 1. Hotel for families with children may have family rooms with standard
hotel furnishings. In addition to the usual cafes and restaurants, there may be
cafeteria for children and teenagers focusing on their needs and interests. There
may also be a playground and a children’s entertainment center where parents can
leave their children under the supervision of specially trained employees who will
watch and entertain them. The parents themselves may also stay with their children
and take part in various games.
138 N. Sergievskaya

The hotel may be located on a picturesque ecologically clean area, with a field,
forest and a river or lake. There may be a garden on the territory of the hotel,
duplicating fairy-tale gardens and nature, so that any person arriving at the hotel
could feel like a small child coming to a fairy tale of his dreams. The fairy-tale hotel
may also resemble Russian fairy tale “teremok”. This will be a great place for
children and adults who will make their childhood dream come true.
Moreover, the hotel would combine the advantages of a “smart” house and
“green” building. It can be assumed, therefore, that the house will pay off within
approximately 4 years. Our very preliminary estimations are provided below.
Option 2. Extraordinary hotel. It will be an unusual, picturesque building that
attracts attention, something like an upside-down house in Novosibirsk or Dubai, or
another extraordinary building.
It may be preferable to conduct a survey among potential customers prior to
design and construction. Potential customers may be asked what kind of extraordi-
nary building they would prefer. The comfort and services provided in such hotel
may be adequate to high standard hotels.
The building will also combine a “smart” house, an “unusual” and “green”
buildings.
An advertising campaign need to be focused on individual needs and preferences
of the potential customers. It may be emphasized that special services will be
provided to those customers who are tired of the routine, monotony and standard
environment and services. Everything is supposed to be unusual and non-standard
here. Particular attention may be paid to the non-standard extraordinary environment
within comfortable living conditions. So to say: “familiar comfort in an unusual
setting”.

Discussion

Below is an approximate estimation of how soon such hotel buildings can be paid
off. The daily rate for rent may will be, for example, about $95 for a single room,
$170 for a double room and $200 for a family room. We would like to propose the
following formula:

CHC
PP = ð1Þ
ðRPN x NR x NDÞ x 12

Where:
PP—payback period
СHC—Cost of hotel’s construction
RPN—Rate of hotel’s room per night
NR—Number of hotel’s rooms
ND—Number of days in a month, 12 months (Table 4)
Non-standard Green Buildings and Smart Houses as Way to Get. . . 139

Table 4 Payback period of mini hotels

Family friendly hotel Non-standard hotel
8 family and 2 single rooms (approximately) 7 single and 3 double rooms (approximately).
Single room Family room Single room Double room
• From about $95 • From about $200 • From about $95 • From about $170
(2 hotel’s room per (8 hotel’s room per (7 hotel’s room per (3 hotel’s room per
day) × 2 = $190 × day) × 8 = $1600 × day) × 7 = $665 × day) × 3 = $510 ×
30 = $5700 (per 30 = $48,000 (per 30 = $19,950 (per 30 = $15,300 (per
month) month) month) month)
• $5700 × • $48,000 × • 19,950 × • $15,300 ×
12 = $68,400 (per 12 = $576,000 (per 12 = 239,400 (per 12 = $183,600 (per
year) year) year) year)
Construction of the hotel will cost approximately $930,000
$68,400 + $576,000 = $644,400 (per year) $239,400 + $183,600 = $423,000 (per year)
$930,000/$644,400 = 1.4 years $930,000/$423,000 = 2.2 years
Conclusion: The hotel will pay off in 4 years. Conclusion: The hotel will pay off in 4 or
We indicate specially a longer period, because 5 years. We indicate specially a longer period,
hotel’s rooms may be empty for some time. because hotel’s rooms may be empty for
some time.

Price of smart house elements purchased per one room can be estimated based on the
following formulas below.

Pse = Pss þ Pls þ P sd þ Psb þ Ptm þ Paqc þ Pgs þ Pab þ Poe, ð2Þ

Where:
Pse—the price of smart house elements
Pss—the price of a smart speaker with voice assistant for management
Pls—the price of emergency leakage sensors
Psd—the price of emergency smoke detectors
Psb—the price of one smart block (it includes up to 8 devices: water, gas, electricity,
heat meters, leakage sensors, electric ball valves, etc.)
Ptm—the price of management of household appliances and electrical appliances
Paqc—the price of air quality control
Pgs—the price of glass break sensor
Pab—the price of an alarm button
Poe—the price of other smart” house elements.
The cost of all smart house elements per room in total is approximately equivalent to
US $ 483.

P = Pse þ ðNlb × PlbÞ þ ðNss × PssÞ, ð3Þ

Where:
140 N. Sergievskaya

Table 5 Cost of smart hotel elements, USD

Family Friendly Hotel and “Non-Standard” Hotel
8 family rooms and 2 single rooms or 7 single and 3 double rooms
Single room Family room
12 lightbulbs, 5 sockets (approximately) 24 lightbulbs, 10 sockets (approximately)
$715—price of all smart room elements $980—the price of all smart room elements
$715 × 2 rooms = $1430 $980 × 8 rooms = $7840
$1430 + $7840 = $9270 (per 10 years in 10 rooms)
$11,000 is the cost for maintenance of offices and common areas per year (including cost of
sensors in all rooms) approximately.

P—the price of smart house elements per year in one hotel’s room
Pse—the sum of the prices of smart house elements
Nlb—the number of smart lightbulbs in a hotel’s room
Plb—the price of smart lightbulbs
Pss—the number of smart sockets in a hotel’s room
Nss—the price of smart sockets
Based on the above, the expenses to upgrade a single room with smart elements will
be $715.
The expenses for double and family room will be $980 (Table 5).
The total amount spent for 10 years is: $9270 + $11,000 = $20,270, and the cost
per year is $2027.
The payback of hotels will be relatively fast for both types of the hotels. The cost
of smart sensors and their installation is subtracted from the amount of rent received
for the hotel’s rooms (see the calculation above).
The reduction the energy consumption of “green” buildings is considerable, see
Fig. 2.
Hotels equipped with smart technologies will bring more profit to their owners
after being paid off. Such hotels will accordingly pay a bigger amount of local taxes.
If the experience of building such hotels will be successful, it will be possible to
build such hotels in different areas of the country. Then it could be helpful to conduct
a survey among potential customers to decide if they would like the same type of
hotels in different areas. Depending on the outcomes of surveys it may be possible to
duplicate various “fairy tales” hotels and to design and build “extraordinary”
buildings. It will attract more tourists.
If the hotels are popular, it may be possible to arrange special tours to visit these
sites and buildings. Hotels could have a small museum—souvenir shops where staff
will tell unusual little-known facts about the life of the cities and regions. They also
may provide useful information about local points of interest. The staff will distrib-
ute calendars with local attractions, interesting historical facts and advertise other
tourist businesses with phone numbers and addresses of places that people can visit.
The hotels may also work with travel agencies to increase their competitiveness.
It is possible to offer educational and/or entertainment tours for children and their
families. It is possible to offer tours for extraordinary hotels, such as tours related to
Non-standard Green Buildings and Smart Houses as Way to Get. . . 141

the life of famous people, book tours, gastronomic tours, eco tours, extreme tours,
etc. If there are more such hotels and the flow of tourists is increased, then this will
attract more funds to the city, the region and the country through the amount of tax
received from hotels.

Conclusion

Both hotel options may attract the attention of potential customers because they
serve their interests. As mentioned above, all people come from their childhood, and
everyone wants to visit the dream of their childhood, especially with their young
children. This may be the case for the Option 1 hotels. For Option 2 hotels, it is
possible to attract additional tourists who want to try something new, something
different from usual, standard. A well-conducted advertising campaign can play a
significant role in this.
There is a good chance of fast payback of the initial costs for the purchase and
installation of smart sensors. It may be possible because smart equipment will
considerably recoup the costs for construction and/or upgrading. The estimations
were made in general terms and do not consider some pluses and minuses of
“extraordinary”, “green” buildings and smart houses that should be also taking
into account.
Moreover, “extraordinary” and “green” buildings may attract attention of tourists
from many countries, with their additional financial resources that will benefit a city,
a region and a country. “Green” buildings may improve environmental situation and
they attract wealthy tourists who care about their health and the tourists and agree to
pay more for “green” buildings compared with the ordinary hotels. Smart houses
may contribute to energy saving and they also may create additional comfort for
tourists.

References

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ru/archive/256/58586/.
Albany, M., Alsahafi, E., Alruwili, I., & Elkhediri, S. (2022). A review: Secure internet of thing
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Product Quality Management Through
the Prism of Consumption in Modern
Society

Nataly Sergievskaya

Introduction

Product quality management and quality control play important role in modern
society. Product quality requirements may vary depending on various conditions
of internal and external environment in different countries. Quality of products,
however, remains very important. It influences the health and life of people and,
ultimately, the well-being of the countries. Quality control strives to assure the
optimum level of quality in according to market expectations (Baltag & Morariu,
2022). Quality and safety of products is monitored by the government bodies of
many countries.
National standard of the Russian Federation GOST R ISO 9000-2015 “Quality
management systems. Fundamentals and vocabulary” proposes the following defi-
nition: “Quality is the degree to which the set of inherent characteristics of an object
meets the requirements.”
GOST 15467-79 of the Russian Federation “Product quality management. Basic
concepts. Terms and definitions” considers the quality of products as a set of product
properties that determine its suitability to satisfy certain needs in accordance with its
purpose (Panova, 2010).
International Standard ISO 8402-86 considers quality as a set of properties and
characteristics of a product or service that give the ability to satisfy determined or
supposed needs.
Quality can be considered in three aspects: quality in product; quality in process;
quality in system. The concept of quality has become global phenomenon thanks to
the emergence of ISO 9001 (Krivokapić & Stefanović, 2020). The International

N. Sergievskaya (✉)
Moscow State University of Civil Engineering (National Research University), Moscow,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 143
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_14
144 N. Sergievskaya

Organization for Standardization ISO proposes the following definition “Quality is a

degree to which the set of inherent characteristics meets requirements.” The ICH Q9
standard considers quality as a degree to which the set of inherent properties of a
product, system or process meet requirements (Alasas, 2018).
The American Society for Quality (AS”) has proposed two options for defining
“quality”:
1. Quality is considered as a characteristic of a product or service that makes it
possible to satisfy explicit and implicit requirements (needs) of customers.
2. Quality is a product or service that has no flaws (de Las Casas & Alecchi, 2020).
The purpose of our article is to propose and consider a conceptual model of quality
management in three blocks, i.e., from the side of the state, enterprises and con-
sumers and to understand how they are interrelated.

Materials and Methods

Comparative analysis is considered as a method. It is proposed to use theoretical

methods of analysis as the main methods of research on this issue. The author uses
the methods of comparison, generalization, an integrated approach, and multilevel
analysis. The use of these methods is justified because this article discusses concepts
that relate to product quality management, and they are the subject of this study.
Let us consider factors that influence on consumer behavior.
Factors influence on consumer behavior:
• desire for personal comfort;
• the availability of technical means of communication and the influence of the
media;
• strengthening the information impact on the population;
• active transition on a commercial basis in most areas of activity in urban life and
its rationalization;
• increasing importance of leisure in cities;
• the impact of international trends;
• metropolitan infrastructure, etc. (Head, 2011).
Internal factors affect the quality of enterprises’ products. They include following
factors:
• production and technological;
• socio-psychological;
• economic;
• organizational (Mizanbekova et al., 2017).
Quality management systems (QMS) are needed in all industrial sectors. They can
ensure that customers receive safe and quality products.
Product Quality Management Through the Prism of Consumption in Modern Society 145

Many enterprises use QMS to make their products more competitive in the
international arena. The most important quality management systems are in the
food industry: Global Food Safety Initiative (GFSI), International Food Standard
(IFS), British Retail Consortium (BRC), Safe Quality Food (SQF) 2000 and Inter-
national Organization for Standardization—ISO 22000: 2005 (Bojkovska et al.,
2014).
The quality management system can face various problems like any indicator.
These include:
• wrong choice of efficiency evaluation criteria
• low level of responsiveness to customer requirements
• low level of control
• formal approach
• low qualifications
• no motivation for quality
• incompetence of staff, etc. (Bocharova et al. 2018).
The functions of product quality management systems include the following:
• macro functions,
• general functions
• private functions
• strategic, tactical and operational management;
• functions of decision-making, control actions, analysis and accounting;
• information and control functions (Kupriyanova, 2015).
There is the list the most popular quality management systems:
1. ISO 9000
2. TQM (Total Quality Management)
3. Premium Quality
4. 6 sigm
5. Lean manufacturing
6. Kaizen
7. Best practices (Mohammad & Rassokha, 2017).
The existence of quality systems plays an important role from the competitiveness
point of view. «TQM (Total Quality Management) is a quality management system
based on the way of thinking of the entire company staff» (Ratter & Nader, 2022)
TQM draws attention because it promotes efficiency and effectiveness. It makes it
possible to achieve sustainable competitive advantage and increase business effi-
ciency (Antunes et al., 2020).
European standards are adopted by one of the 3 European standardisation orga-
nisations (ESOs): CEN, Cenelec and ETSI. National standardisation bodies with-
draw any conflicting national standards.
Let us briefly consider several national standards organizations (Table 1):
146 N. Sergievskaya

Table 1 National Standardization organizations (Kupriyanova, 2015a)

N Country Standardization organizations
1 Russia Committee of the Russian Federation for Standardization, Metrology and
Certification
2 Japan Japan Industrial Standards Committee (JISC)
3 Germany German Standards Institute (DIN)
4 USA National Institute of Standards and Technology (NIST)
5 England British Standards Institute (BSI) PERINORM
6 France French Association for Standardization (AFNOR)

1. Russia. Committee of the Russian Federation for Standardization, Metrology and

Certification. It introduces norms, rules, characteristics of standardization and it
adopts GOST RF.
2. Germany. German Standards Institute (DIN). It protects the interests of the
citizens and the environment. It eliminates technical problems in commerce and
resolves many other issues related to standardization.
3. USA. American National Institute of Standards and Technology (NIST). Its main
task is to help solve nationwide problems, for example, the security of the public,
environmental protection, etc. In the US, there is a non-profit and
non-governmental organization NIST (Kupriyanova, 2015a).
4. The Japan Industrial Standards Committee (JISC) is a government-authorized
organization.
There exist general quality standards, but emphasis is placed on additional items in
each country.
Everywhere special attention is paid to environmental protection. The Japan
Industrial Standards Committee (JISC) is responsible for creating new industrial
standards and product labeling. The American National Institute of Standards and
Technology (NIST) promotes industry competitiveness and innovation. Thus, each
state pays great attention to quality issues, because the quality of products is one of
the main issue when people purchase goods.
The table of standardization organizations is in some countries is below
(Kupriyanova, 2015a).
Each country has its own standardization organizations., it is customary to create
institutions (in Germany, etc.), associations (in France, etc.), committees (in Japan,
etc.), standardization for them abroad (Kupriyanova, 2015a). These organizations
are an essential part of the technical infrastructure of each country. They are also the
most important representatives of their countries’ stakeholders regarding standard-
ization on the world stage.
We decided to take two countries as an example: Japan and China. These
countries play an important role in the international arena. The Japanese quality
management system is considered the best in the world and regarded as fundamental.
Its implementation is based on highly qualified personnel. This is also facilitated by
the combination of high level of competence and technological discipline. In
Product Quality Management Through the Prism of Consumption in Modern Society 147

Fig. 1 Quality management

model for small businesses
in Japan (Kovtunova 2012)
Philosophy

Quality Employees
Process Control and
Model Partners

Problem
solving

addition, groups of employees (quality-control circles, QCC) were created where

problems of production and quality were discussed. These QCC contributed to the
great economic effect and success in reducing defective work and improving product
quality (Kupriyanova, 2015).
Quality management is one of the main bases for the competitiveness of Japanese
enterprises.
Attention is paid to the following in this model: (Fig. 1).
1. Philosophy establishes the values, beliefs and principles on which it is going to
function.
2. Process. It is important to maintain high quality in the design, planning, produc-
tion of products and services, their use and in the management of the company
itself.
3. Employees and partners. It is believed that the production of quality products
depends on the company’s employees.
4. Solution of problems. Many companies use fact-based decision making
(Kovtunova 2012).
Japanese consumer tastes are oriented towards local produce. That’s why a number
of products and services do not attract consumers. Although, these products may be
in demand in other countries. Another feature is that until recently, consumers were
restrained in their desires. This is in keeping with Confucian culture. She disap-
proves of excessive consumption. It is believed that only what is necessary should be
used (Synodinos, 2001).
148 N. Sergievskaya

Table 2 Laws in China (Nyrova, 2007)

N Provisions in Laws Laws in China
1 Consumer’s right to product safety Art. 7 of the Law of the People’s Republic of China
“On Protection of Consumer Rights” dated 31.10.93
2 Compliance formation product qual- Laws in China “On the contract” from 15.03.99
ity requirements of the contract
3 Civil liability for low-quality goods Laws in China “on the contract”
Law of the People’s Republic of China “On Product
Quality”
4 Administrative responsibility Laws in China “On Product Quality”
5 Criminal Liability Criminal Law

Now let’s look at China. China is the largest trading partner for over 130 coun-
tries. The country is also the largest exporter and it is the second largest importer in
the world (Delux & Vannak, 2018).
Product quality is a major factor in customer satisfaction. The demand for
products depends on the quality that the manufacturer provides to the consumers.
China passed the Product Quality Law in 1993. The articles appeared in the
Criminal Law which provide for criminal liability for a number of violations of
product quality in 1997. One can see a table on the provisions regarding product
quality in the laws of the PRC below (Table 2). The law “On the Protection of
Consumer Rights” states that products must be safe for human health and their
property. It is written in the law of the People’s Republic of China “On the contract”
that the quality of the products should be as in the terms of the contract. If this is not
clearly stated, then there is proposed a sequence of solving this problem.
For example, one should first negotiate and one make additions to the contract,
etc. The Law of the People’s Republic of China “On Product Quality” states that if
an entrepreneur sells a product that does not meet state or industry standards, etc.,
then he will face administrative responsibility. If he harms the health of buyers
deliberately, for example, he passes off fake products for real ones, or it is an expired
product, etc., then this will already be a criminal liability (Nyrova, 2007). Thus, if
one compare laws, one can see that the state controls the activities of entrepreneurs in
order to ensure the quality of products in a high level.
Nowadays China is a growing economic power. The country exports its industrial
products all over the world (Khan & Ahmed, 2016).
Today, China is the leader in the production of cars, computers, mobile phones,
etc. China has significant part of the production orders of Apple, Dell, Hewlett
Packard, Sony, Nintendo, Microsoft, Motorola and others (Kulneva, 2012). Table 2
shows some of the laws of the People’s Republic of China regarding product quality.
Table 2 presents a number of laws of the People’s Republic of China. They
contribute to the more responsible attitude of entrepreneurs to the quality of their
products. Any product must be safe for people and property (“On Protection of
Consumer Rights”). The quality of the goods must comply with the terms of the
contract. It is stipulated what should be done if the parties have not defined quality
Product Quality Management Through the Prism of Consumption in Modern Society 149

requirements (“About the contract”). Administrative or criminal liability comes for

what violations (Nyrova, 2007).
So, quality control management systems are important for any business that
manufactures products. Quality control is the process of ensuring that products
and services meet certain standards, and it is critical for businesses to maintain a
high level of quality in order to remain competitive and successful. In recent years,
both Japan and China have developed their own quality control management
systems. While both countries have adopted similar standards and practices, there
are some important differences between the two systems.
First, Japan has a more thorough and detailed system of quality control. It is
divided into two distinct phases: pre-production and post-production inspection.
During the pre-production stage, a series of tests are conducted to make sure that
each component is of the correct quality. The Japanese system also requires that all
parts come from certified suppliers, and that the suppliers meet strict quality stan-
dards. During the post-production stage, quality inspectors examine the final product
to ensure that it meets the customer’s specifications.
In contrast, China has a less rigorous system of quality control. Unlike Japan, the
Chinese system does not require that all parts come from certified suppliers. Fur-
thermore, during the pre-production stage, the quality control process is focused
more on ensuring that the materials used are of the correct quality, rather than on
ensuring that all parts come from certified suppliers.
The quality control management systems of Japan and China have been studied
for decades to assess their relative strengths and weaknesses. As two of the largest
economies in the world, both countries have invested heavily in quality control
management systems to ensure the highest quality of products and services.
In Japan, the Total Quality Control (TQC) system has been in place for over
60 years. This system is based on the principles of Kaizen (continuous improvement)
and focuses on the prevention of defects rather than their detection. It emphasizes
rigorous process control, inspection, and testing to ensure that products are of the
highest quality. Quality control processes in Japan are often extremely detailed and
include multiple levels of checks and balances. This helps to ensure that the highest
standards of quality are met.
In contrast, China’s quality control management system is relatively new and is
focused on the detection and correction of defects. This system is based on the
principles of Statistical Process Control (SPC) and emphasizes the use of statistical
methods to identify and address problems. Quality control processes in China are
often less detailed than those in Japan and rely more on spot-checking and random
testing.
Overall, both Japan and China have invested heavily in quality control manage-
ment systems to ensure the highest quality of products and services. However,
Japan’s TQC system is more comprehensive and rigorous, while China’s SPC
system is more focused on the detection and correction of defects. As such, Japan’s
system is generally considered to be the more reliable of the two.
150 N. Sergievskaya

Results

Let us consider the model of “management of product quality” (Fig. 2).

This model shows what can influence on a state, an enterprise and consumers.
Each indicator implies the presence of other indicators in itself.
Some indicators can influence on the state. They are the following:
1. It is external factors, for example, the image of the state.
2. It is internal factors, for example, legislation (standardization) and the health and
life of citizens.
Some indicators can influence on enterprises. They are the following:
1. It is manpower, for example, skilled workers and unskilled workers.
2. It is financial opportunities, for example, high and low.
3. It is management activities, for example, competent management and illiterate
management.
Some indicators can influence on consumers. They are the following:
1. It is income, for example, high and low.
2. It is needs, for example, security, spiritual values and material values.
3. It is the influence of the media, for example, positive influence and negative
influence
Let’s consider this model in more detail.
The state plays a leading role everywhere and in everything. From the point of
view of the state, internal and external factors can influence product quality

State
External factors Internal factors

Enterprises
labor resources financical opportunites management activites

Consumers
the influence of the
income needs
mass media

Fig. 2 Model “product quality management”

Product Quality Management Through the Prism of Consumption in Modern Society 151

management and consumption. External factors include the image of the state
according the quality of its products. In the modern world, the name of a country
can already be a signal to all other countries. The goods are high quality. The goods
are medium quality product. The goods are poor quality. Such perception of the
goods of any country depends primarily on itself. It depends on how efficiently and
responsibly the enterprises perform their work. However, one cannot exclude the
mass media of various countries, which influence on the attitude of their consumers
to the foreign goods.
They can create both positive and negative impressions of the goods. The internal
factors include legislation which plays the most important role. The state adheres to
generally accepted norms in the world and it also issues its own normative and legal
acts on product standardization, which do not violate generally accepted norms. The
state controls that enterprises produce high quality products. The health and life of its
citizens depends on it. Poor quality products can seriously harm people. In world
practice, there have been cases when an ordinary product became extremely dan-
gerous for people’s lives because proper control was not carried out over the quality
of products at the enterprise. The state protects its citizens from any danger. A
country can occupy a higher position in the world if the life expectancy of the
population is higher than in other countries.
Various internal and external factors is influenced on entrepreneurs. It can be
personnel, financial opportunities, managers, sales opportunities of an enterprise,
and much more. As for external factors, entrepreneurs are influenced on consumers,
competitors, suppliers, political, economic, legislative, technological and other
factors. Let us look at human resources, financial opportunities and management
activities. As already mentioned above, enterprises are constantly influenced on
many factors which are positive or negative. They can help enterprises to develop
and strengthen themselves in the market or harm them.
Labor resources. Skilled workers need to be paid high wages, but they provide
high quality products. Unskilled workers can be paid little and even meager wages,
but the quality of the goods will be low or completely substandard. Some short-
sighted entrepreneurs hire unskilled workers to save money. It ends up serious
financial losses. They can be much higher than the amount that entrepreneurs
saved on salary. In some cases, enterprises may even be on the brink of collapse.
It is especially actual if highly qualified specialists worked in enterprises before this
changing and the goods are intended for wealthy people. They always make high
demands on the quality of the goods.
Financial opportunities. Each enterprise has its own financial opportunities. The
issuance of quality products requires financial opportunities. As mentioned above,
highly qualified specialists and workers are needed. It is necessary to purchase
quality material for further production of the goods. Entrepreneurs must have such
opportunities and the understanding that high-quality products are needed by every-
one. It is needed not only by people, but it is also needed by entrepreneurs
themselves. It will create a favorable image for their products. The goods will be
in great demand and they bring entrepreneurs great profits.
152 N. Sergievskaya

However, not all entrepreneurs understand it. Not everyone has the financial
ability to hire highly qualified specialists and purchases high-quality expensive
material. These entrepreneurs are starting to produce the goods for people with
low incomes, because they do not demand on the high-quality goods. It may
ultimately destroy the image of the enterprise, and the entrepreneurs can’t sell the
goods to wealthy citizens, because these citizens will not want to buy poor quality
products. Accordingly, all of it may negatively affect their profits.
Management activities. The head of the enterprise must control that high quality
product is produced and he manages this process. It is a serious laborious and
multifaceted process. Only the head of the enterprise can manage this complex
process. All power is in his hands. Everything depends on his opinion and ability
to manage people and processes at the enterprise. In the case of competent manage-
ment, the enterprise produces quality products. It improves its image and attracts
more and more customers and it receives maximum profit. If the management is
illiterate, it affects the quality of products and consumers may go to competitors and
the company will suffer significant losses.
Consumers. They can be psychologically influenced by the mass media. Its
impact may be positive or negative. The opinion of a person may depend on what
he read in newspapers, journals or what he heard on radio and television according to
the quality of the goods of an enterprise. Personal income influence on the consumer
himself very much. If consumers have a high income, they have increased require-
ments for product quality. They may allow themselves to purchase various high-
quality products. If consumers have a low income, then they do not always have the
opportunity to buy the high-quality goods. First of all, they will pay attention to
prices and only then to quality.
As for needs, it is important for any consumer that the goods and services would
not be dangerous to his health. As a maximum, they must meet his interests and
expectations and they be useful for his health.
As for spiritual values, they play an important role. They influence on preferences
and interests of people. For example, someone prefer to read books and go to
theaters. Other people like discos etc. So, people are interested in different services.
Material values. Any product may meet the needs of consumers according to its
quality or it may frustrate consumers.
Let us consider this classification in the form of a table. You can consider the
quality of products on it. Visibility will show the relationship of the three blocks and
it helps to make the right decision in time. It will be able to avoid or reduce negative
points. For example, “green” buildings. They improve the quality of life of the urban
population (Table 3).
“Green” buildings enhance the country’s image and reputation on the world
stage. They have beneficial effect on the health of citizens. Certain laws have been
issued for their construction. From the point of view of the enterprise, they require
serious financial costs, but they will also bring large profits. The construction of such
houses requires skilled workers and competent management. From the point of view
of consumers, “green” buildings can buy people with high incomes and high
requirements for the quality of houses. It is believed that “green” buildings improve
Product Quality Management Through the Prism of Consumption in Modern Society 153

Table 3 Factors which influence on the state, enterprises and consumers

State External factors Image +
Reputation +
Internal factors Legislation +
Health and life of citizens +
Enterprise Labor resources Skilled workers +
Unskilled workers
Financial opportunities High +
Low
Managerial activity Competent management +
Illiterate management
Consumers Income High +
Short
Needs Security +
Population
Spiritual values
Material values +
Media influence Positive +
Negative

Fig. 3 The principle of

circulation

enterprises consumers

state

the ecological situation in cities. That’s why we can talk about the protection of the
population from the point of view of ecology. The media also write mostly positive
reviews about “green” houses.
If we take a hypothetical situation that the media will actively oppose “green”
houses. They will create an opinion that “green” houses are not useful. If people will
believe in this, then they will refuse to buy these houses. It will not be profitable to
build them, companies will begin to lose profits and less taxes will go to the state
treasury.
From above mentioned, we can conclude. All blocks are interconnected with each
other and the principle of circulation is implemented (Fig. 3).
The principle of circulation is the interconnection, interdependence of all blocks
and it is a change in one of them can lead to a change in other blocks.
154 N. Sergievskaya

The author proposed this principle and definition to show how all three blocks are
closely connected with each other. The next section will consider this in more detail.

Discussion

Let us consider the state, enterprises, consumers based on the above information. We
will see how they are interrelated and what factors influence on them.
1. We consider how internal and external factors influence on a state and how the
state influence on entrepreneurs, society and consumers.
As mentioned above (Fig. 4), the state can be influenced by other countries, the
political and economic situation in the world, the place of the state in the
international arena, etc. There can be different economic, political and social
conditions inside the country. Let us image that the general world requirements
for product quality will change. For example, they will become stricter. Each
country will have to bring its normative legal acts in accordance with generally
accepted world requirements. All enterprises will have to reconsider their actions
in accordance with the new requirements. Consumers will also need to consider
the new rules (Fig.4).
2. We consider how internal and external factors influence on enterprises and how
enterprises influence on society and the state as a whole.
As already mentioned, the enterprise can be influenced by external and internal
factors (Fig. 5). External factors include political, economic, legislative, techno-
logical, socio-cultural, moral and ethical factors, etc.
Internal factors include production and technology; socio-psychological; eco-
nomic; organizational factors (Mizanbekova et al., 2017).
Changes occur at the enterprise under their influence. The enterprise starts to
produce higher quality or lower quality products. This was described above.
Accordingly, it is reflected in consumers. The quality of the product may meet
their expectations and requests. Consumers may not be satisfied with the quality

factors influence the state influence

the state
on a state on society

Fig. 4 The relationship of factors that influence on a state and the state influence on society

enterprises
factors influence
enterprises influence on
on enterprises
society

Fig. 5 The relationship of factors that influence on enterprises and entrepreneurs influence on
society
Product Quality Management Through the Prism of Consumption in Modern Society 155

factors influence
consumers influens
on consumers consumers
on entrepreneurs
behavior

Fig. 6 The relationship of factors that influence on consumer behavior and consumers influence on
entrepreneurs

of the goods. Then they will buy the goods from competitors. They will also buy
the goods from other countries. If consumers are satisfied with the quality of the
goods, then quantity products will increase and the goods would be bought
abroad (Fig. 5).
3. We consider how internal and external factors influence on consumers and how
consumers influence on entrepreneurs, society and the state as a whole.
The consumer can be influenced on traditions, customs, mass media. The
consumer can also be influenced on information pressure, a person’s place of
residence (village or megalopolis), the consumer’s income, his marital status, age,
style and way of life and much more (Fig. 6).
Entrepreneurs influence on consumers in various ways because they want to
get the maximum profit. Entrepreneurs create consumers’ desires. The mass
media and advertising impose various desires by a person.
Peter Miller and Nicholas Rose write in their writings that a consumer can be
both an active seeker of pleasures and a victim of artificially imposed needs that
can completely destroy him as a person. A powerful psychological influence is
exerted on consumers (Dodd, 2000).
The desires of consumers can be changed. It may concern as product quality as
their worldview. After it, they want to purchase the new goods and services.
Thus, consumers begin to influence on entrepreneurs because they demand to
change products. Entrepreneurs will have to adapt to the changed desires of
buyers (Fig. 6).

Conclusion

If there are unresolved problems even in one of the blocks (the state, enterprises,
buyers) they will negatively affect the whole picture. It doesn’t matter what level the
problem is. It may be insufficient control by the state. It may be not fully thought-out
policy of the company’s managers regarding product quality management. It may be
employees who do not have the proper qualifications. All these can lead to a decrease
in product quality. As a result, consumers will not purchase this product or service.
The company will lose profits and it will pay less taxes to the treasury. It will, in turn,
affect the population, which is assisted by the state from the country’s budget.
Councils are created at some enterprises abroad, which include the heads of the
enterprise, their deputies, and one representative from various departments. It
156 N. Sergievskaya

becomes possible to quickly resolve emerging problems at the highest level in the
event of problems in the workplace. The advantage is that there are no delays,
because this group includes the director, the head of the department and a simple
worker. In this case, there are no intermediate links that lengthen and delay the
solution of the problem.
The scientific novelty of the author’s model is the consideration of a multilevel
study of quality management from the point of view of the state, enterprises and
consumers. The author introduces of the concept of the “cycle principle”, i.e. it is
comprehensive consideration of the problem of quality at different levels
interconnected with each other. A change in one block causes a chain reaction in
other blocks and it leads to a change in product quality in one direction or another
(positive or negative). For example, in one of the countries, a number of enterprises
began to produce low-quality products in their own country and even abroad.
Consumers began to perceive the goods of this country as a low-quality product.
This damaged the image of this country. Then the state adopted legislation tough-
ening the punishment for low-quality goods. Over time, the quality of products has
improved and the attitude of consumers has changed for the better towards it. They
start to buy it. In another country, a major entrepreneur was able to change the
attitude of buyers to product quality from negative to positive. His products have
always been of high quality. That’s why the goods began to be considered as high-
quality abroad from this country. This improved greatly the country’s image on the
world stage.
Product quality management is one of the most important and responsible
phenomena. Product quality influence directly on the health and life of citizens,
the country’s image in the international arena.

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Regulation of ESG-Ecosystem: Context
and Content Evolution: Energy Sector
Study

Nadezhda N. Pokrovskaia , Vitaly A. Mordovets ,

and Nataly Yu. Kuchieva

Introduction

The harmonic development of human communities, sustainability and optimal

wellbeing strategy of society were the core issues of discussion since the Hellenistic
philosophers (Aristotle, 1912 [350 B.C.E.]; Plato, 1998 [375 B.C.E.]) and the Adam
Smith economic treatise (Smith, 1776). The concept of the sustainability had been
mentioned by forest owner and lumberjack Hans Carl von Carlowitz, who studied
the trees’ natural reproduction rate to ensure the long-term survival of his enterprise
(Carlowitz, 1713; Groschopf et al., 2021). This economic vision of the efficiency of
sustainable approach is concentrated in the investment analysis to screen out the
companies with high risks related to the environmental, social or governance
concerns (ESG approach, formulated in the report of the United Nations Global
Compact team) (UN, 2004).

N. N. Pokrovskaia (✉)
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
Saint-Petersburg Electrotechnical University “LETI”, St. Petersburg, Russian Federation
Peter the Great St. Petersburg Polytechnic University, St. Petersburg, Russian Federation
Herzen State Pedagogical University of Russia, St. Petersburg, Russian Federation
Immanuel Kant Baltic Federal University, Kaliningrad, Russian Federation
V. A. Mordovets
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
N. Yu. Kuchieva
Federal Antimonopoly Service Administration for St. Petersburg, St. Petersburg, Russian
Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 159
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_15
160 N. N. Pokrovskaia et al.

The literature review on the historical genesis of conceptual approaches to ESG

can include a narrow background (financial-economic contribution) and a broader
investigation of the social embeddedness of private business. This article considers
ESG approach as a new stage of the development of harmonized governance which
represents a step in the whole society development through balancing interests of
various stakeholders’ groups.
The financial approach relates to the investment assessment to exclude the risky
business from a portfolio according to the metrics with the ESG components (see
Andersson et al., 2022; Amel-Zadeh & Serafeim, 2018; Riding, 2020; Nauman,
2019):
• Environmental aspect focuses on preserving the natural environment, protecting
biodiversity and the historically inherited natural landscapes, saving resources.
Environmental issues addressed in the ESG-agenda include greenhouse gas
emissions, resources and energy efficiency, deforestation, pollution of air and
water, climate change.
• Social aspect includes the cultural identity and diversity as well as collaboration
and inclusion on the basis of the contribution of people to community wellbeing
and development, as well as the human capital investment. Social aspect focuses
on people and relationships include working to support diversity, gender and age
equity, non-discrimination of racist, agist, ethnic, religious criteria, and inclusion
movements.
• Corporate governance orients the activities and initiatives towards efficient ways
to create added value, in the form of profit for owners and investors. Governance
focuses on the efficiency, cybersecurity practices, structure, compensation,
preventing corruption.
The metrics to measure the risks of the potential investments in companies are
influenced with the financial practices (WEF, 2020) and the global trends (Adams
& Abhayawansa, 2022; Afolabi et al., 2022): “combined impacts of climate change,
COVID-19 and economic inequality contribute to the urgency for businesses to
embrace long-term, sustainable value creation” (Big4, 2020).
According to the broader point of view, ESG-concept is considered as a balanced
approach to the management of the private business companies taking into account
the interests of the community under the regulation of the authorities (Van Duuren
et al., 2016). ESG stands for Environmental, Social and corporate Governance issues
as a whole approach. It represents a paradigm to balance the interests of the private
business and society—that are contradictory in the field of the profit’ distribution and
external effects’ attribution, but that are common in the sustainability of the growth
and well-being progress in long-term horizon.
The institutional realization of the ESG investment metrics is supported by
the chief executives of private business, who intend to follow the requirements of
the ESG, e.g., presented in the BRT statement (Business roundtable) signed by the
CEOs of two hundreds of US leading companies (representing 37 mln jobs in US,
accounting for 24% of US GDP) (Business Roundtable, 2019).
Regulation of ESG-Ecosystem: Context and Content Evolution: Energy. . . 161

The national State regulatory systems differ and reflect the whole economic,
environmental and social situation of the countries. The geography, climate, abun-
dance or scarcity of natural resources (water, minerals, etc.) influence the choice of
strategies for economic growth and prosperity in the regions; socio-cultural diversity
determines the divergence of national approaches to the priorities in values and goals
of sustainable development.
From the social-economic and managerial points of view, the ESG represents the
conceptual approach of profit-driven business to seek the best ways to obtain the
whole outcome of the enterprise as a value creation chain. The value chain consists
of nexus of satisfied needs for customers, networking with fair remuneration and
reward for private business employees, free-lancers, gig executors and
sub-contractors.
This systemic complexity of the added value as a source of business profit is now
rationalized and articulated by private and public organizations, but, in fact, the
homo oeconomicus of Adam Smith had been conceived as a person with moral
principles and religious grounds, and the invisible hand of market had been led by
the conscience and responsibility of people as a national society citizens and as a
local community members (see both the treaties on Moral Sentiment and on Wealth
of nations—Smith 1759, 1761, 1776).
An idea to preserve nature is mentioned by Frederic Winslow Taylor in his
Principles of Scientific Management (1911), he starts the book with the words:
“President Roosevelt in his address to the Governors at the White House, prophet-
ically remarked that “The conservation of our national resources is only preliminary
to the larger question of national efficiency.”” (Taylor, 1911).
The business has been understood as a distinctive subsystem of the societal life,
and A. Smith demonstrated the community roots of economic behavior. Later, the
further researchers investigated the social embeddedness of the economic decision
making and corporate choices (Granovetter, 1973, 1985, 2005), including the levels
of the national society and the local community networking (Rank, 2014).
The social responsibility can have various coverage—according to M. Friedman
concept of the differentiated functions, business has only the responsibility toward
the shareholders, and it consists in maximizing dividends (Friedman, 1970).
The construction of a balanced methodology and systemic approach to rule
enterprises leads to the fostering of an ESG-ecosystem that includes the institutions
and infrastructure helping business to reply to the up-to-date expectations of the local
community, of the national society, of the global humanity.
The regulation of the ESG implementation takes into account the dynamic of the
context, the geopolitical shifts and global supply chains evolving, which determines
regulatory interests to point out various aspects of the content to rule.
These issues are studied in the article on the basis of the factual material from
energy sector, which represents the fundamental real economy industry and at the
same time reflects the new understanding of the balance of long-term planning and of
short- and middle-term anticipations to build forecasts and to construct efficient
networking. The energy sector demonstrates the dramatic case of the evolution of the
162 N. N. Pokrovskaia et al.

context. The new socio-economic space requires the change of the substantial
regulative principles and mechanisms.
This paper deals with the essential components of the social-economic analysis,
the core concepts of the research are regulation and ESG-ecosystem. The regulating
actors include the public administrations (government, authorities) and corporate
top-managers. The examined factors relate to the dynamics of the conditions—
geoeconomic, geopolitical, national social context,—that provoked the evolution
of the content of the ESG-systems, which are transforming into ESG-ecosystems,
this transformation required the evolution of their regulation.

Materials and Methods

The methodology includes the theoretical and empirical components.

The theories involved include the economy of the external effects and public
goods, the digital economy, innovation growth and digital transformation; the
conceptual analysis is based on the examination of evolution of the notions and
terms used to describe social-ecological issues as concerns of the private business
companies and of the State interests, public initiatives and governmental regulations,
including the construction of ESG-ecosystems. The theoretical analysis is fulfilled
on the basis of the historical and analytical publications, especially, the reporting of
intergovernmental organizations, such as OECD and UN.
The empirical methodology is based on the analysis of statistics, on the desk
review of national regulative approaches and on the case study of corporate choice in
the field of ESG.
The research examined statistical data in field of the global ecological outcome,
including production and consumption emissions data during previous 60 years
since 1960 till 2020, according to the report on Global Carbon Budget 2021.
The investigation of the best practices of the energy sector companies (such as
BP, Shell, Exxon Mobil) and of the regulations introduced by national States (with
examples of France, China, USA) and supranational governmental bodies (European
Commission, European Council), of strategy choices and measures, that are subjects
of the desk review and case study methodology. This paper represents the desk
review of the historical elements of the energy market regulation in the EU, of the
ESG issues regulation in energy sector by the governmental bodies of China (current
situation), of the neutral carbon impact regulation in Russia. The article reflects the
study of the four units of analysis: the sustainability approach of the national
monopoly EDF (France) and of three Russian companies: Gazprom (energy sector),
InterRos group (mining) and Severstal (metallurgy and mining). The chosen com-
panies are the leading producers (Gazprom in gas exploration and transport) and the
significant energy consumers (Severstal produces metals and neon, that requires
important volumes of electricity).
The study questions include the analysis of the differentiation of the global and
local regulation in the field of the ESG with respect to the regional context; the
Regulation of ESG-Ecosystem: Context and Content Evolution: Energy. . . 163

examination of CO2 impact attributed to different countries; the investigation of the

ESG-balance in corporate governance and social and environmental concerns. The
case study also intends to describe the preliminary hypotheses to analyze the new
substantial basis of industrial rationality (EDF case with insufficient planning and
Gazprom reaction to the external impact of the aggression on NorthStream).
The regulation of ESG-ecosystem is the main subject of the research gap for this
article, where the following propositions are posed:
• to describe the social and economic context that provokes the raising of ecolog-
ical issues as private business concerns;
• to find out the influence of the historical period, economic model (balance
between market and planned economy models), geographical and socio-cultural
(civilization) factors’ impact;
• to examine the regulation introduced by authorities at different hierarchy levels
(local community, national State, supranational integration);
• to examine the most pertinent regulations of the ESG-ecosystem.
The significant limitation of the research represents the necessity to investigate the
long-term causality, but the outcome of the regulations implemented in the field of
the ESG-ecosystem construction requires decades of the data collecting and experi-
ence accumulating. Nevertheless, despite this dramatic limitation, the researchers
made the attempt to analyze the existing experience and practices and to propose the
suggestions on the basis of the anticipations based on the cases investigated.

Results

The regulation of the private and collective interests, of their balance in short- and
long-term horizons, of the fruitful co-living conditions is based on the coordinated
policies between societal subsystems.
Regulation and social embeddedness of economic subsystem. Historical and
socio-cultural background for the sustainable growth implementation
The historical forms of the societal functioning of the economic activities include
paradoxes such as inventions that advanced the societal forms (steam machine and
concrete were invented before the new era, but not used in the slave labor based
society with the war as the main tool to get the slaves). The societal functioning
demonstrates a high efficiency of the differentiation of functions (labor division,
specialization and cooperation), but the separate development of the society sub-
systems produces the external effects, the tragedy of commons and tragedy of anti-
commons, these effects are to be regulated under the notion of the ecosystem. The
term of ecosystem is introduced into social sciences from the biological research and
with the development of the systemic approach. All these trends led to the appear-
ance of the ESG-agenda as a balanced conceptual framework for the social and
economic analysis of the society wellbeing.
164 N. N. Pokrovskaia et al.

The social responsibility issues appeared with the change of the societal organi-
zation: the modern industrial society (“modernity”) obtained its efficiency due to the
division of labor and specialization, this societal feature includes also a high
differentiation of societal functions, when the economic activity is divided from
the whole societal deployment and became a “separate” sector to organize human
beings’ efforts to satisfy people needs in the most efficient way.
The charity plays a significant role to cope with social inequalities and to fight
against community problems, such as alcohol or drug addiction or home violence.
The history of the charity includes the primal customs to share food and clothes, and
with the differentiation of the society and the deployment of the industrial economy
the philanthropy became a considerable parameter to evaluate a person’s contribu-
tion to the social progress, and for the most successful citizens and society members
the social activity served an efficient tool to obtain and maintain their social position
as respected people with endorsed wealth, to increase the social capital of the person
(Bourdieu, 1986; Coleman, 1988).
The widest understanding of the business purpose as societal subsystem repre-
sents the distribution of all the profits made among the local community, national
society or global mankind (Freeman, 2004), especially, in the diverse forms of
charity.
Among Russian industrial and commercial leaders (producers and merchants) we
can enumerate many benefactors, such as Savva Ivanovich Mamontov (who built
railroads), Timofey Savvich Morozov (who maintained schools, hostels and hospi-
tals for workers of his manufactories), Pavel Mikhailovich Tretyakov (who directed
funds from his flax factory and textile sales to maintain a school for deaf-mute
children and donated an art gallery to Moscow) (Molodkova et al. 2022). This
glorious history left the footprints until our today life, the Tretyakov gallery in
Moscow is today the famous museum and a center of the art development and
exhibitions.
Historically, problems of protecting nature and the environment have arisen since
antiquity, in connection with fires of man-made origin (fires in Rome are most
famous, but they were typical of all cities until the end of the Middle Ages).
With the beginning of mass industrial production and the saturation of markets,
the scale of disasters increased dramatically: depletion of the natural environment
(deforestation, extinction of rare animal species), accidents in mines, dam failures,
explosions and poisonings with toxic reagents. Discharge of oil products into sea
bays and urban rivers led to their ignition. The burning of dry grasses as a traditional
method of soil reclamation led to devastating fires, thus, since 1917 in the Altai
province for 3 years in a row the authorities could not cope with fires and on an order
was issued “to kill the forest arsonists caught on the spot”, which reduced the area of
forest and steppe fires. The preserving of the environment underlines the human
beings’ life conditions.
From 1960 to the 2020s, environmental protection underwent a complex trajec-
tory of development:
Regulation of ESG-Ecosystem: Context and Content Evolution: Energy. . . 165

• The twentieth century was marked by an increase in man-made disasters and a

multitude of investigations that received publicity in the form of rumors and/or
were widely reported in the media, which led to a gradual politicization of the
“green” agenda. This period was marked with accidental interest towards nature
in the first half of the century and with the marketing communication and
promotion use of the green issues to enhance the sales of goods and products,
closer to the end of the century;
• By the beginning of the third millennium, environmental protection processes
were becoming increasingly complex, sophisticated, integrated with a host of
extra-biological issues and embedded in the social fabric, including above all
political and economic relations over resources availability;
• The second decade of the twenty-first century has led to a search for a balance
between the corporate interest (governance) and the public interest (social), and to
an understanding of a single set of principles for sustainable development based
on resource conservation and environmental protection, within the concept
of ESG.
The systemic analysis of the social responsibility studies demonstrates the attempts
of isolation of the social concerns from the corporate management business issues
until the post-modernity—M. Friedman had limited the business to the aim of
satisfying needs of customers with the maximal efficiency, the profit as a single
and the main measuring tool to evaluate the efficiency. The profit-driven business,
nevertheless, appeared less efficient if it does not take into accounts the preferences
of the customers about the ecological behavior of the company, that became an
important criterion of choice on the saturated markets.
M. Friedman limiting approach is sufficient in the economies of survival, where
the satisfaction of the basic organic needs of the biological survival of populations
plays the primordial role (Friedman, 1970). But, on the saturated markets with a
wide range of goods and services, where the essential pressing questions of the
people surviving are on a large scale solved, where the multiple factors have impact
on the sales funnel and customer journey, the business companies are forced to take
into account the diversity of the preferences of their clients—forced with a
de-personalized market pressure, but also forced by the citizens’ initiative activities,
such as manifestations of ecologists who block the roads and gates to an enterprise to
protest against its pollution, natural resources depletion or discrimination of
employees.
The economic process of the broader social engagement of business relates to the
transition of the “simple reproduction” of the labor force (in Marxist terms) toward
the “enriched” labor and “enlarged reproduction” of human resource, to the invest-
ment in human and social capital (Putnam 2001).
This systemic vision required the new analytical approach to better construct the
societal functioning of the private business companies according to the regular
principles, that appeared in the form of the conceptual models of sustainable growth,
human capital development and economy of knowledge. The ecological issues were
examined from the point of view of the further planning of the economy
166 N. N. Pokrovskaia et al.

development—as an environment to foster businesses in future, to attract human

resources as employees and to obtain available air and water in further decades and
centuries.
If corporate social responsibility of private business is aimed at the priority of
public interests over the interests of companies, the ESG concept purpose is to
balance the interests of different groups of actors and their needs: on the one hand,
social and environmental objectives, ensuring the quality of the natural and socio-
cultural environment at a certain achieved level of civilization development, on the
other hand, economic and technological development determines the level of needs
satisfaction, in hierarchy of the claims and preferences of the customers the new
groups are privileged, including harmony with nature and with personal growth.

Global and Local Regulation

Market economic behavior allows us to separate the subjectivity of behavior (action)

and control (sanction):
• The actor who decides to make a choice of behavior model, performing the
action, translates the choice made into reality in the framework of its activity
strategy and tactics,
• society (community, collective institution, neighbors, colleagues) and specific
structures, public organizations and establishments exercise social (unformal and
legal) control and sanctioning (encouragement or condemnation of the chosen
behavior model up to fines and other forms of punishment within the social order,
such as social isolation, exclusion and ostracism) (Pokrovskaia, 2017).
In the Hellenistic conception of a person, an individual and a citizen as a member of
the society (especially, of the city community) are not separated, so the responsibility
for the consequences of one’s actions depends to a small extent on external praise or
condemnation. Such an idealistic picture of the world was based on the idea of
communism as a society in which educated people with intellectual power would
live, which, as the USSR experience showed, failed half a century after the intro-
duction of universal secondary education: it was found that secondary education had
little help in forming a person with rational thinking, at the zoo-population level this
is explained by the mutational diversity necessary for evolution (Pokrovskaia, 2022).
Sociological knowledge studies regulation as a form of behavioral control in both
forms—internal, interiorized, based on value-meaning priorities (allows the individ-
ual to postpone momentary satisfaction of a need for the sake of a long-term goal),
and external control, forcing the individual to choose a desirable behavior model for
society (this compulsion is considered by the individual in advance in choosing a
model within risk management, which avoids potentially unwanted sanctions in
assessing the probability of their occurrence) (Pokrovskaia & Garin, 2022).
To effectively optimize behavioral choices, the individual relies on a
3-component model of choice criteria: rational, emotional, and behavioral factors
Regulation of ESG-Ecosystem: Context and Content Evolution: Energy. . . 167

are influenced through different cognitive tools. For example, for environmental
issues, the “green” agenda reflects the emotional, affective aspect (social advertising
uses heartbreaking photos of bloody animals, etc.), environmental planning
embodies the rational aspect (to minimize all kinds of harm it is necessary to
consider all possible consequences of the decision and assess the probabilities of
their occurrence), demonstrating examples, creating infrastructure and institutional-
izing behavioral choices reflects the conative component (separate waste collection
is easier to master).
Thus, although in socio-economic studies we can often see the division into
individualism and collectivism as forms of domination of private interests over
group interests or group interests over individual and private interests, but in the
social fabric in the course of activity these interests are closely intertwined, which
allows for the purposes of the study only conditionally to separate macroeconomic
and microeconomic approach to ESG, considering, for example, practices of lobby-
ing, containment and delocalization (Vertakova & Plotnikov, 2017).
Nevertheless, both company-level regulatory practices and intergovernmental
agreements can be considered.
For organizations, especially private profit-oriented companies, along with ratio-
nal sustainability goals and emotional public pressure (e.g., people handcuffing
themselves to factory gates), a code of conduct for corporations and for investors
must also be proposed. Two regulators have offered perspectives on the behavior of
business entities: a supranational body of the UN and national bodies that regulate
reporting and securities markets.
The UN developed the Global Compact in 2000. Global compact reflects 10 busi-
ness principles, including the social and ecological element. Among Russian com-
panies, Severstal signed the UN Global Compact.
Further, to develop the agenda and to take into account the complex networking
system of the global activities in the twenty-first century, UN adopted the Millen-
nium Development Goals, which in 2015 were replaced by the Sustainable Devel-
opment Goals (SDGs), reflecting 17 benchmarks for business and public
administration action. The Social Responsibility Goals were declared at the state
level and promoted more informally, with the exception of pollution control mea-
sures, for which enforcement primarily includes fines imposed on companies, which
directly affect their profits and indirectly affect their stock price and investor interest.
In 2019, the goals of balanced social, environmental and corporate governance
were articulated in the UK Stewardship Code 2020 as “creating long-term value for
clients and beneficiaries, leading to sustainable benefits for the economy, the envi-
ronment and society” (UK Financial Reporting Council: UK Stewardship Code
2020, p. 4).
If at the microeconomic level ESG reflects the factors of choice of models of
corporate behavior aimed at social responsibility and resource saving in the broad
sense (including resources of the external environment and external effects of the
activities of enterprises), the study of cross-country differences in the socio-
environmental sphere shows the difference between absolute and relative indicators.
For example, between 2010 and 2020, China was the leader in terms of the total
168 N. N. Pokrovskaia et al.

3 7
CO2 emissions (GtC yr –1)

2.5 China 6 USA

Per capita emissions

(tC person–1 yr –1)
5
2
USA
4
1.5
3 EU28
1
EU28 2
Global
0.5 1
India China India
0 0
1960 1970 1980 1990 2000 2010 2020 1960 1970 1980 1990 2000 2010 2020

Fig. 1 CO2 emissions, in volume and per capita (period 1960–2018), according to the Global
Carbon Budget 2018 (Le Quéré et al. 2018)

3
CO2 Emissions (GtC yr –1)

6 USA
Per capita emissions

China
(tC person–1 yr –1)

2 USA 4
EU27
EU27
1 2
World
India China India
0 0
1960 1980 2000 2020 1960 1980 2000 2020
Year Year

Fig. 2 CO2 emissions, in volume and per capita (1960–2021), according to the Global Carbon
Budget 2021 (Friedlingstein et al. 2022)

amount of socio-environmental resources. China led in total carbon dioxide emis-

sions, U.S. businesses emitted about half as much CO2, while when assessing per
capita emissions, these positions are reversed exactly, and per capita emissions in the
U.S. are more than twice as high as those in China (Fig. 1).
At the same time, it is necessary to take into account not only the production
volumes of carbon dioxide emissions, so in the 2020s the data began to be published
not only about the emissions during the production by countries-producers (territo-
rial), but also about the volumes of consumption of products made with carbon-
intensive technologies, in particular in countries-importers of carbon-intensive
goods (shown by dashed line) (Fig. 2):
The comparison of the two Global Carbon Budgets 2018 and 2021 show that the
economic and socio-environmental well-being of the inhabitants of developed
countries, the United States and the European Union Member States (in the 2018
Budget the EU still included the UK) is to a significant extent provided by the
delocalization of “dirty” carbon-intensive industries in such countries as China,
India, included in the “periphery countries” and often considered part of the
BRICS (Brazil, Russia India, China and South Africa).
Regulation of ESG-Ecosystem: Context and Content Evolution: Energy. . . 169

Analyzing the data in Figs. 1 and 2 and looking at carbon dioxide emissions per
capita for 1960–2021, we can find that the United States is the leader in emissions,
exceeding China by more than 2 times and without taking into account consumption.
The 2021 budget is different in that it estimates not only production emissions, but
also consumption (dashed line), so the graphs in Fig. 2 show that the EU (27 coun-
tries) and the U.S. imports goods, the production and transportation of which emitted
carbon dioxide, i.e. In other words, the delocalization of production shifts pollution
from the territory of importing countries to exporting countries, and taking into
account imports, the per capita estimate of CO2 emissions in the EU is markedly
higher than per capita CO2 emissions in China.
The long-term industrial reasoning revealed as relevant since 1996–2003, when
European Commission adopted the Directives on the Liberalization of the Energy
market in the fields of electricity (1996) and whole energy sector (2003, further,
2009) (Directive 96/92/EC of the European Parliament and of the Council of
19 December 1996 concerning common rules for the internal market in electricity;
Directive 2003/54/EC concerning common rules for the internal market in electricity
and repealing Directive 96/92/EC; Directive 2003/55/EC of the European Parlia-
ment and of the Council of 26 June 2003 concerning common rules for the internal
market in natural gas and repealing Directive 98/30/EC; Directive 2009/72/EC of the
European Parliament and of the Council of 13 July 2009 concerning common rules
for the internal market in electricity and repealing Directive 2003/54/EC).
It is worth to be noted, that the first agreement that had been a root of the actual
European union, was exactly about the energy resources—European Coal and Steel
community and EurAtom were the first components of the future European Eco-
nomic Community (EEC), transformed to the European Union (EU) according to the
Maastricht Treaty of 1992.
Nevertheless, the France and Germany resisted to the implementation of the 1996
and 2003 Directives (the detailed analysis is presented in Buchan 2012), and by
2018, “in only 4 Member States more than 50% of households have switched to a
non-incumbent electricity supplier: Portugal, The Netherlands, Great Britain and
Belgium” (Pepermans, 2019).

Discussion

In the postwar years the documents reflected the understanding of a unified approach
to the formation of a new urbanized environment, which was reflected terminolog-
ically in the concept of environmental protection, to which were added, along with
elements of nature, and aspects of civilization, anthropogenic, cultural character,
such as the value of the landscape as an object of human aesthetic perception along
with the perception of green spaces as a source of oxygen: the biological greening
promotes the recycling of carbon dioxide and purification.
Ecological science studies the patterns of development of the natural environment
and its impact on humans, primarily from a biological point of view, and is part of
170 N. N. Pokrovskaia et al.

the “green” agenda as a whole. At the same time, the concept of environmental has
long been used in emerging countries as ecological because of the context of
industrial economy and re-industrialization.
At the same time, attention should be paid to the terminologically different
trajectories of this concept: while environmental refers primarily to improving the
physical conditions of human life, the term “ecological” is broader and refers to the
actors taking responsibility for all consequences of their behavior choices (in this
meaning the term was also used in the Russian Presidential Address of April 2021)
and, in particular, for the potential harm caused by their actions to specific people or
an indefinite number of persons in closely intertwined ties in society (Pokrovskaia,
2022).
In the scientific literature, environmentally oriented behavior is studied in the
following aspects:
• in the first sense, as behavior that causes minimal harm to the environment,
focusing on the types of risks, the dangers of specific actions, materials, etc., up
to the problems of cybersecurity and digital ecology;
• as the behavior of individual actors, in particular buyers (consumer research,
behavioral psychology, social psychology, social regulation of behavior in the
organization and in the market), as well as collective (not always institutional)
actors—enterprises, communities, societies and civilizations;
• as public opinion, an argument in journalistic work, a tool in political struggle,
fashion, a trend of people’s involvement in electoral or consumer social move-
ments, including issues of threats to “freedom, security and well-being”;
• as a tool of rigid pressure on private business, carried out both by public initiative
groups in the political and socio-economic interests of society as a whole or the
local community, and by competing companies in the market, up to cross-country
competition (the introduction of a cross-border carbon tax Carbon Border Adjust-
ment Mechanism);
• as a phase of sociodynamics—the reaction of postmodern humanization to the
consumer society (from industrial rationality to the person, the meaning of life,
motivation and sharing economy as a model of rejection of possession for the
sake of use).
Forms of economic activity aimed at sustainable development, resource-saving in
production and consumption, maximization of use of created goods (regardless of
distribution of ownership rights to them) are part of the rational aspect of responsible
behavior.
To summarize, we note that economic factors for behavioral strategy selection
still carry significant weight in a complex multicriteria selection model. Reducing
the number of parameters in the multi-criteria model to 3 groups within the ESG
concept (social, environmental, managerial) allows private businesses to more
effectively build communication strategies in the market. At the same time, consid-
ering the weight of each group of factors in this model, it is necessary to recognize
that the social agenda performs both the role of criteria and the communication
Regulation of ESG-Ecosystem: Context and Content Evolution: Energy. . . 171

argument during the construction of relationships with consumers with market

partners, including investors.
For economic actors in both production and consumer behavior, the key factors in
choosing a behavioral model are price. For business, interest in the environmental
agenda reflects the regulation of investment and demand pressure. The consumer
seeks an indulgence for the satisfaction of needs in the form of the purchase of
“green” products (which is expressed in the advertising communication of corpora-
tions) and declares concern for the environment, while the real action or inaction of
the population reflects spontaneous momentary factors of non-systemic nature and
the price of the issue (in large measure, established by the State).
In the second half of the twentieth century economic research revealed that
ecology as a factor of pressure on business can be used to improve the life of society
or to drive competitors out of the market. The emergence of the concepts of
“responsible consumption” and resource conservation continued the trajectory of
the market economy, while the ideology of distributed consumption largely reflected
the planned communist idea and was based on the idea of separating property rights
as the right to own and the right to use goods, which one may not own by right of
ownership (sharing).

Digital Economy Impact of the ESG-Balance

and the ESG-Concerns in Energy Sector

The preservation of a comfortable natural environment for humans, which have

evolved over the past decades as a “green agenda”, as well as an analysis of the main
economic and socio-institutional factors on the formation of a balanced ESG busi-
ness approach, including the socio-psychological and political influence of the media
and marketing tools, especially, within digital economy.
The service economy, the digital transformation of business and sharing models
of economic relationship with conscious consumption represent the concepts that are
often considered as possibilities to avoid the pressure of the real physical economy
on the self-actualization of persons and on the socio-cultural development of the
societies and communities. But, the digital tools and online economic models are
based on the electricity, and the personal growth is possible only when the person is
alive and has necessary resources (air to breath, water to drink, food to eat, house to
be covered from rain, snow and cold), that is why the energy and food security play
the considerable role in political negotiations. The XXth century added also the issue
of the technological sovereignty due to the deployment of the digital economy of
knowledge and innovation as the main factor of growth.
Energy is used to produce any other good or service, the bitcoin mining impact on
the environment is studied since 2012, when the volume of the electricity spent to
mining begun to overwhelm the national annual electricity consumption of some
countries (in 2019–2022 the crypto-currency mining surpassed the Finland,
172 N. N. Pokrovskaia et al.

Argentina, United Arab Emirates, Netherlands or Belgium annual electric power

consumption) (Criddle, 2021; Hinsdale, 2022; LaToya, 2021). The energy resources
used to produce the electricity include the exhaustible (hydrocarbon) and renewable
sources of energy (solar, wind, etc.). The depletion of the hydrocarbon energy
sources raise concerns about sustainable growth of economy for the further
generations.
This example demonstrates the basic character of the energy sector even in the
digital economy. The ESG-ecosystems as an infrastructure to regulate the
ESG-realization are constructed today by the national States and supranational
integrations, such as European Union or Eurasian economic union, to support the
citizens and private business initiatives in the field of the balanced social-ecological
agenda with the global growth. The energy sector gives the diverse examples of
construction of balanced systems as well as of disequilibrated strategical decisions.
The energy production is necessary to the whole development of any activity in
the economy. Nevertheless, the interests of the strategic Energy infrastructure are
often opposite to the ESG-agenda, especially, if it is perceived as simple declara-
tions. Energy produces waste (contradicts to the E), the corporate governance of a
profit-driven business often is opposite to the collective absorption of external
effects (pollution and exhausted landscape as well as distribution of income to
modernize equipment instead of paying taxes, the robotization of routine operations
and decrease of human resources risks contradict to S), and long-term sustainable
strategic infrastructure is a national State interest (which is often opposite to G).
The ESG approach is based on the socio-cultural and geographic determination,
and the regions have various priorities in the fields of Environment and Society, and
diversity of the national States interests determines the diversity of the choices in the
ESG implementation. Therefore, this project aims to collect data on the digital
strategies of energy companies around the world, in order to make a comparative
analysis to better distinguish their similarities and differences, with the aim of
developing strategies to help companies effectively implement ESG development.
Proven ESG credentials are going to be an important driver for energy industry
stakeholders, lenders, insurers, shareholders, regulators and even employees and
consumers. The transition to a low carbon economy is a transformation in the
making and companies must ensure their business is aligned with the new landscape.
That means a fundamental appraisal to climate risk, to achieve an ESG rating that
will enable them to attract and maintain the support of the all the stakeholders critical
to their businesses. Understanding that the energy industry plays a crucial role in
reducing the environmental impact of its operations is critical.
Therefore, industry leaders must strive to align their business models with social
and environmental responsibility best practices. By adopting an effective ESG
model, industrial operators can ensure they minimize harm to the natural environ-
ment while striving to optimize their productivity.
The summer 2021 demonstrated the readiness of many companies to decrease the
oil and gas extraction: in July 2021, Exxon Mobil cut back 26% worldwide produc-
tion forecast on 202; Shell expected output to decline 1–2% a year, planned to cut its
production of traditional fuels such as diesel and gasoline by 55% in the next decade;
Regulation of ESG-Ecosystem: Context and Content Evolution: Energy. . . 173

BP also announced the decline of the oil and gas: a 40% cut by 2030 (Zettler, 2021).
The expected consequences of these decisions were the increase of oil price and of
the companies’ profits, and the 2022 results demonstrated this corporate outcome,
which is logical according to the rules of the market economy.
The Chinese regulation, in fact, is oriented much more to the incentives that
should motivate the autonomous actors’ making decision towards a more ecological
(less harmful) behavior. Chinese policy includes the financial and institutional
measures as well as the direct organization of the electric infrastructure:
• the People’s Bank of China has launched several concessional including conces-
sional funding for banks to increase the number of emissions reduction projects,
as well as a lending program for clean coal projects;
• there are no general requirements for mandatory ESG reporting in China, but
since June 2022 a set of voluntary guidelines for Chinese companies went into
effect on reporting environmental, social and governance performance;
• the first document regulating the scope of green bond issuance was issued in
China in 2015, in 2021 it was finalized in accordance with international standards
and National Bank is working to create a transition funding taxonomy for some of
the most carbon-intensive sectors such as thermal energy, steel and cement
production as well as agriculture;
• China is investing in clean transportation, two-thirds of new subway lines in the
world and almost 90% of new high-speed rail lines are functioning on the basis of
a clean energy; in many cities in China, most city buses are already electric;
electric cars are projected to account for 40% of all of all car sales in the country.
These examples demonstrate the complex and elaborated approach that is more
efficient than declarative approach and simple prohibition, or zero tolerance to the
fuel and energy development.

Case: Severstal

As mentioned above, the global seller of metals, Severstal had to implement the
highest sustainability standards, from Global compact to the Measuring Stakeholder
Capitalism Initiative of the World Economic Forum (Severstal joined it in early
2022). The company follows the GRI 102–13 and participates in the international
initiatives: The Women in Mining Russia Association; The Association of European
Businesses; The Belgian-Luxembourg Chamber of Commerce; The World Steel
Association; The ResponsibleSteel; The German-Russian Forum; The Northern
Dimension Business Council; The Eurasian Economic Commission; The Measuring
Stakeholder Capitalism Initiative of the World Economic Forum; The National
Network of the UN Global Compact in Russia; The German-Russian Chamber of
Commerce.
The mission of the company is “to be the leader in value creation”, but the losses
in 2022 were important due to the blocked assets in foreign warehouses and income
174 N. N. Pokrovskaia et al.

from the Western purchases. Nevertheless, Severstal continues the construction of

the digital open ecosystem and has developed Russia’s first digital platform for the
sale of rolled metal products PlatFerrum.ru, that, among others, ensures the
ESG-compliance of the participants.

Case: InterRos

The interesting example of the real activity of Russian entrepreneurs in the field of
the balanced ESG-approach took place in March 2022, when a part of the Russian
State assets in several countries was blocked and the options to block some Western
business and assets in Russia were discussed. V.O. Potanin, the owner of the holding
group InterRos, was many times declaring his position to prevent the nationalization
of the foreign corporate assets.
29 May 2020 there was a leak of 21,000 tons of diesel fuel from an electricity
station belonging to InterRos, it was the largest incident in the Russian Arctic,
Vladimir Putin has declared a state of emergency on a federal scale. The accident
occurred due to errors in the design and construction of piles of the fuel tank.
Criminal cases were opened against the employees of the thermal power plant and
the mayor of Norilsk. The authorities estimated environmental damage at 147.7
billion rubles, Greenpeace estimated the damage at 6 billion rubles. As of September
2020, the company spent 11.5 billion rubles on the elimination of the state of
emergency. In August 2021, the Ministry of Emergency Situations announced the
complete elimination of the fuel spill. In July 2022, the company agreed on a
peaceful settlement of the dispute—the company promised to release juvenile fish
into the affected rivers for 17 years in advance and finance scientific work (according
to the media, this was the last unresolved issue in connection with the accident).
Since the first digital bank in Russia TCS (Tinkoff credit systems) was under
question, V.O. Potanin decided to integrate the banking institution into the group and
saved one of the Russian strategic banks.

Case: Gazprom

The giant gas producer Gazprom has a balanced social policy, reflects the ESG
principles in the reporting (GRI 102–32; GRI 102–40; GRI 102–42). In 2021, an
online survey of stakeholder groups was conducted with automatic processing of the
results. 1766 respondents (10 stakeholder groups, excluding foreign energy market
regulators) took part in the online survey. Each topic was asked to rate in order of
importance on a three-point scale. Working Group assessed the degree of actual
influence of the Gazprom Group on possible material topics using the method of
expert assessments. The assessment was attended by 24 members of the Working
Group. The results of the survey and assessment became the basis for building a map
Regulation of ESG-Ecosystem: Context and Content Evolution: Energy. . . 175

of material topics. The topics located in the upper right quadrant of the matrix were
recognized as priority and mandatory for disclosure. The most significant topics
included Industrial safety in the Gazprom Group (GRI 403); Compliance with socio-
economic, environmental requirements of the legislation (GRI 307, GRI 419);
Emission management in the Gazprom Group (GRI 305); Economic performance
of the Gazprom Group (GRI 201, GRI 207); Compliance with human rights (GRI
406); Waste management in Gazprom Group (GRI 306, OG 7).
The group Gazprom faced a dramatic pressure from the Western restrictions
during the 2022. On 26 September 2022 3 of the 4 pipes of the Nord Stream
underwater gas pipeline in Baltic sea were exploded, with the leaks of about
400,000 tons of methane. The financial losses of Gazprom related to the explosion
include the cost of the erupted gas, the potential income which could be obtained by
the group if the pipes were used at their complete capacities, and the cost of the
pipeline engineering and building. Nevertheless, the group Gazprom supports its
commitment to the ESG agenda. Now, Gazprom bases its ESG-ecosystem on the
goal of carbon neutrality and on the criterion of industrial efficiency more than on the
profitability issues.

Case: France Nuclear Plants

The another example of France demonstrated in the summer 2022, that the clear
prohibition and the declaration of will is not sufficient to develop in real world: in
France, the monopoly EDF had been working to close the nuclear plants since
several years, by the August 2022 many reactors are stopped, and the lack of energy
and, especially, the increase of price for the electricity provoked the request from the
government to re-open the stations, that requires now several years to educate and
train the specialists—the EDF has closed 2 stations and was preparing to stop
12 others, when the France realized that the electric power became more expensive,
and the company professionals “were training to close stations and not to maintain
them” (see the interview of the EDF President Jean-Bernard Levy on 29 Aug 2022,
Levy 2022). This example demonstrates the inefficient way of regulation of the
energy sector that requires long-term planning with various scenarios.

Conclusion

The cases of the energy sector demonstrate the diverse approaches implemented by
companies and authorities to the regulation of the ESG-ecosystem on the local,
national and regional levels. The article deals with the regulatory cases which led to
the development or decrease to non-optimal strategies chosen by governments and
by communities. The investigation of regulatory decisions with positive and nega-
tive effects permits to conclude on the shift of the substantial content in the
176 N. N. Pokrovskaia et al.

ESG-ecosystem regulation. The theoretical analysis showed the key concerns about
the tools of regulation, the diversity of the regulative mechanisms to apply to the
economic behavior, and the impact of the socio-cultural and regional components for
the efficiency of the regulation of the ESG-ecosystem.
The examined examples of the regulative approaches applied by companies and
by local and national communities to the ESG system functioning allow researchers
to formulate several statements, which require the further research and verification:
• the social and political ESG-regulation takes into account the specific needs of the
industries. The field of real economy sectors such as energy industries (and
related issues of the energy security) determines the preponderance of long-
term strategic reasoning and shifts in the context and content of the regulation
in favor of the industrial rationality and strategic effectiveness rather than finan-
cial performance as a core criteria of assessment. The concept of the ecosystem as
a sustainable system with diversity of participating stakeholders and with bal-
anced strategies of development is coherent to describe the managerial vision of
the ESG as a multi-criteria model of functioning. At least, for the energy sector,
the notion of the ESG-ecosystem reflects a sustainable corporate governance
model enrooted and embedded in the local community, regional environment
and national socio-cultural background;
• the socio-cultural and civilizational context is to be introduced in the
ESG-planning and policy creation process, the regional features and local com-
munity requirements reflects the physical reality that is significant as well as the
global interests. Nevertheless, the values hierarchical scale is enrooted in culture,
the universal opinions always have specific priorities in a country, region, or
civilization. The general guidelines for ESG metrics are helpful, but the concrete
regulations should differentiate according to the local natural, economic, political
and socio-cultural particularities;
• the scientific research results depend on the wide spread opinions’ impact, the
scientists follow the regional agenda and, sometimes, are not able (have no
sufficient social, economic or political resources) to insist on and to defend the
independent outcome of their research. The change of the researchers opinions
reflect the change of the public opinion, nevertheless, the scientific knowledge is
only one that can serve as the ground to construct the ESG-ecosystem regulation;
• the industrial reasoning and long-term logic are to be privileged in the both
in-dividual and collective making decision process on the level of the private
profit-driven companies as well as of the national States and supra-national
integrations;
• the human activity has an influence on the environment, the goal of the
ESG-ecosystem regulation is to compensate this impact instead of an idea to
eliminate any footprint of human beings on the Earth. That means that
ESG-ecosystem intends to assure the neutrality of the human activities impact
and not to assure the zero impact; carbon neutrality as the aim of the
ESG-ecosystem regulation is a good example of this shift in the local, regional,
national or global goal-setting;
Regulation of ESG-Ecosystem: Context and Content Evolution: Energy. . . 177

• the organizational structures, institutions and establishments respect the rules

when the incentives to choose a behavioral model are significant, the simple
prohibitions require the very expensive controlling and administration, that
means that the regulative mechanisms and measures to implement a
ESG-policy should engage the actors who are motivated to respect the
ESG-principles themselves, to self-control and to manage concrete tasks towards
the general purpose.
• The causal attribution analysis demonstrates the importance of the complex
systemic approach to better understand the reasons of the private actors, and to
better coordinate the individual and collective interests for the further
development.

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Ecological and Humanitarian Approach
to Assessing the Tourist and Recreational
Attractiveness of Cultural Landscapes
Drawing on the Example of the UNESCO
World Heritage Site «Curonian Spit»

Babek Asadov , Alexander Baranov , Sofia Baranova,

and Inga Philippova

Introduction

There are some significant socio-economic changes that have been taking place in
the world in recent decades. One important feature of them is the dynamic develop-
ment of the territory through tourism. The formation of new tourist territories is a
priority task at various levels: international, national, regional and local. The
increased attention to the development of this process indicates that for many
countries the problems and prospects of using tourist and recreational resources
are being actualized, especially in rural areas, which potential is the basis for the
development of cultural landscapes within the framework of tourism activities. At
the same time, its impact on the natural environment as a result of human activity
increases. Consequently, issues of harmonization of human interaction with the
environment against this background become important. Therefore, to solve the
problems of preserving cultural landscapes while increasing the level of their
development, it is necessary to apply an integrated ecological and humanitarian
approach.

B. Asadov
Saint-Petersburg University of State Fire Service of EMERCOM of Russia, St. Petersburg,
Russian Federation
A. Baranov (✉) · S. Baranova
Herzen State Pedagogical University of Russia, St. Petersburg, Russian Federation
I. Philippova
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 181
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_16
182 B. Asadov et al.

Materials and Methods

The cultural landscape as a developed humanitarian (social, national, historical)

space is a part of the natural-territorial complex. In addition to natural resources, it
includes the components of the cultural environment. These components are formed
as a result of the natural historical interaction of society and the natural landscape.
Like the other developed socio-cultural spaces, the cultural landscape of rural areas
was also formed as a result of natural processes, phenomena and, most importantly,
creative human activity over a long period of time. The whole cultural space that
formed represents the basic ideas of the epoch about each historical period, then this
is reflected in the preserved historical and cultural monuments, local cultural tradi-
tions, values, morals, etc., that in turn always have a certain influence on the
formation of the appearance of human settlements, their way of life. This process,
which has no clear boundaries, is very far from being completed at the present time.
The effectiveness of the use of tourist and recreational resources of rural areas
depends on various factors. Along with the most active issues of territory develop-
ment, the adopted “Concept of sustainable development of rural territories for the
period up to 2030”, is designed to ensure the preservation and restoration of such
resources as natural landscapes, historical and cultural monuments, temples, which
are important components of the process of tourist and recreational development of
cultural landscapes (Asadov et al., 2017, p. 62).
Today, the cultural landscape is increasingly being considered as a tool for
solving a number of scientific, theoretical and socio-practical problems in the context
of studying the problems of interaction between man and nature (Gumilev, 2008,
p. 216). Despite the diversity of concepts and approaches in this field, there is
generally no systematic integrative view of the problems of the development of
cultural landscapes. Its component-based structure is also insufficiently clarified, so
criteria for evaluating these components have not been developed yet.
In order to determine the main components of the ecological and humanitarian
approach in assessing the tourist and recreational attractiveness of cultural land-
scapes, it is necessary to identify the features of its tourist and recreational potential
and to digest the existing definitions that characterize this process.
Taking into account the complexity and versatility of the cultural landscape,
which is based on both ecological and humanitarian essence, a method of expert
assessments was proposed. Each expert (16 scientists) gave a score of individual
areas in the range from 1 to 10. The collected information made it possible to create
and visualize data in the form of a petal diagram.
Ecological and Humanitarian Approach to Assessing the Tourist. . . 183

Results

Rural tourism is the recreation of citizens in rural areas in guest houses created by a
rural family on the basis of their own residential house and household plot, as well as
on a plot of land allocated for farming. The main figure that provides an accommo-
dation, meals and acquaintance with the sights of the countryside is a rural family
(Krivosheyeva et al., 2014, p. 105).
Such approaches are very common. They have roots deeply implanted in Western
practice, as a result of a sharp change in the stereotype of behavior of rural residents.
This happens due to the transition to mechanization of labor, increasing production
efficiency, job cuts, an ever-increasing proportion of the urban population and the
emergence of an acute desire to take a break from the stresses of large agglomera-
tions. However, it is quite obvious that in the conditions of Russian reality, this
process (tourist and recreational development of cultural landscapes of rural areas)
has very significant differences.
Firstly, historically, there has been a common form of suburban recreation in
Russia with the conditional name “to the village to grandfather”. As a result, a
significant part of the population has the opportunity to spend their free time
(especially vacation time) in the village. There is a “village tourism”.
Secondly, during the Soviet period especially, the practice of allocating land plots
to citizens for recreation purposes and with the right to erect a residential structure
was very widespread in Russia. VCIOM (VCIOM: Russia Public Opinion Research
Center) estimates that at least 27% of Russians have a seasonal cottage. In this
regard, it is fair to say that there is a specific “country tourism” (Asadov & Baranov,
2015, p. 172).
Thirdly, amateur tourism (with elements of sports and romance) with tents,
backpacks, guitars and other tourist accessories is very widely developed in
Russia. It is enough to point out that tourist equipment stores are still focused mainly
on the active amateur segment of consumption. In addition, the practice of quiet and
active hunting and fishing has historically developed. Therefore, hunting, fishing,
mushroom, berry, etc. tourism arises.
Thus, it should be emphasized that the peculiarities of the process of tourist and
recreational development of cultural landscapes of rural areas in Russia have their
own specifics. They consist in the fact that a significant part of Russians fully
participates in the process of tourist and recreational development of cultural land-
scapes of rural areas at the level of self-organization. However, in the understanding
of tourist activity as a service sector tourism is not considered!
In our opinion, in order to comprehend the phenomenon of tourist and recrea-
tional development of cultural landscapes of rural areas, it is necessary to rely, first of
all, on the resources of the enclosing landscape. Since it is the presence of certain
resources or functions of the cultural landscape that can determine the forms of
tourist and recreational development of the territory.
In this sense, dividing cultural landscapes into ecological (natural) and anthropo-
genic landscapes, among which it is possible to distinguish:
184 B. Asadov et al.

UNESCO
WORLD
HERITAGE
SITE

Fig. 1 Classifier of UNESCO World Heritage Sites

(a) monuments of agricultural landscapes (arable, irrigation, pasture, hay, garden,

etc.);
(b) monuments of forestry landscapes (forest-cultural, park, utility, water protection,
etc.);
(c) monuments of water management landscapes (pond, reservoir, canal, etc.);
(d) monuments of industrial landscapes (quarry-dump, quarry, road construction,
etc.);
(e) monuments of military landscapes (landscapes of various types associated with
the preparation and conduct of military operations) (Baranov, 2005, p.31).
Each type of landscape has its own structural features determined by typological
affiliation. There are no strict algorithms for describing cultural landscapes and their
typological differences, and therefore there can be no consensus on the unity of the
process of its tourist and recreational development. In addition, the landscape is
considered as a territorial unit of ecologically balanced development, and in the light
of modern trends in the protection of natural and cultural heritage, it is a model of
sustainable development (Baranov & Fedorova, 2012, p. 27).
Typological features identified using the classifier are group features (common to
several World Heritage Sites (Baranov, 2017, p. 23), and unique features [specific to
a particular object, for example, underwater heritage (Asadov et al., 2021)] can be
identified by comparing different objects, Fig. 1.
Ecological and Humanitarian Approach to Assessing the Tourist. . . 185

Discussion

Thus, due to the lack of a unified scientific justification of this phenomenon and the
blurring of the formulations of tourist and recreational development of cultural
landscapes of rural areas, this leads to numerous discussions in the practical sphere
about the content and orientation of such a concept as “rural tourism” (rural tourism)
(Krivosheyeva et al., 2014, p. 106).
Despite the fact that many scientific papers have been devoted to the above-
mentioned problem, it is obvious that no consensus has yet been formed on its
definition (Grishin et al., 2014, p. 42). Moreover, in the literature one can also find
such forms of development of the cultural landscape of rural areas as bucolic (Moser
& Peterson, 1981), manor (Nyurenberger et al., 2020), country-style (Winkworth,
1991), rural (Wu et al., 2022), green (McBoyle, 1996), soft (Azevedo, 2021),
sustainable (Tan & Law, 2016), agro (Karampela et al., 2021), farm (Nematpour
& Khodadadi, 2021), gastronomic (wine, cheese, tobacco, coffee etc.) (Cheung,
2008), ethno (Dashkova & Ivushkina, 2021), geo (Özer & Mülayim, 2022), craft
(Adom et al., 2021), countryside (Sievänen et al., 2007), cottage, rustic, amateur,
sports, forest, hunting and fishing, local lore, medical and wellness, literary, etc.,
Fig. 2.
The evaluation result is determined in the range from 1 to 10 according to the
following criteria: 1. Missing. 2. Extremely low. 3. Low. 4. Below average.
5. Medium. 6. Above average. 7. Good. 8. High. 9. Very high. 10. Absolute.
The existing international practice of tourist and recreational development of rural
areas indicates the need to expand the discourse around new forms and methods of
tourist and recreational development of rural areas. It is important to note that in this
process, the ecological and humanitarian component of the tourist and recreational
development of rural areas and its prospects for development in the context of
dynamic changes in society, becomes a necessary factor in the regional development
of the country. It is not surprising that the development of this process contributes to
the emergence of socio-economic and environmental problems (Amelkina, 2020,
p. 55).
The analysis of modern problems of tourist and recreational development of rural
areas indicates the insufficient use of ecological and humanitarian components in the
development of this process. Despite the great importance of tourist and recreational
resources, Russia is one of the few countries with a low level of development of
organized tourism in rural areas, both in quantitative and qualitative indicators.
Assessment of tourist and recreational potential is one of the most important tasks
of modern recreational geography (Yavorska et al., 2019). As a practical study, the
UNESCO World Heritage Site “Curonian Spit” was considered (Asadov et al.,
2019).
In the methodology proposed by the authors for assessing the tourist and recre-
ational attractiveness of cultural landscapes, there is an integrated approach based on
a systematic ecological and humanitarian analysis of the main components of
nature—the geospheres of the Earth (atmosphere, hydrosphere, lithosphere and
 186
B. Asadov et al.

Fig. 2 Methodology for evaluating the tourist and recreational potential of the territory by the main geospheres of the Earth and types of tourist space
development
Ecological and Humanitarian Approach to Assessing the Tourist. . . 187

Fig. 3 Visualization of the results of valuating of the tourist and recreational potential of the
national Park “Curonian Spit”

biosphere) on the one hand, and the components of culture—the spheres of society
(theosphere, politosphere, economosphere and sociosphere), on the other
(Korneevets et al., 2018; Tsvey & Sokolov, 2014). Each of the listed spheres can
be evaluated in the range from 1 to 10 points (Baranov & Baranova, 2021, p. 156).
Visualization of the results of valuating the tourist and recreational potential of
the national park “Curonian Spit” is shown in Fig. 3.
Thus, the overall assessment of the tourist and recreational potential of the
Curonian Spit National Park is 7.0 (out of ten possible). The ratio of natural spheres
was 8.5 against 5.5 cultural. At the same time, this object is represented in the
UNESCO World Heritage List by criterion v—cultural landscape (Baranov et al.,
2020, p. 145). In general, the assessment is very high, but it gives an important signal
to the local authorities that there are very significant opportunities to increase it by
solving the identified problems in the social, political and economic spheres of
society.

Conclusion

Thus, the assessment of the tourist and recreational attractiveness of cultural land-
scapes, that is an important component of the sustainable development of the
territory, using an ecological (lithosphere, atmosphere, hydrosphere and biosphere)
and humanitarian (economosphere, sociosphere, politosphere and spiritosphere)
approach becomes more accurate. In addition, the results obtained and analyzed in
a petal diagram allow tourists to see the best and worst positions of different spheres
188 B. Asadov et al.

and find the sites that they need, and the organizers of tourist activities to see the
problem areas in their product and continue working on its improvement.

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Marketing Communications as a Tool
for Sustainable Development
for City-Forming Organizations

Tatiana Afanasyeva , Elena Torgunakova , and Evgeniy Torgunakov

Introduction

In 2015, the United Nations adopted a document of the world space transformation
in the field of sustainable development until 2030. The basic concept of the idea of
sustainable development is to balance the interests of the main areas of the world
space: economy, ecology and society. In order to achieve and maintain a balance in
the three opposing areas—nature, society, and the economy—17 major directions
were selected. This is because the entire history of human evolution has been
characterized by conflict in these three spheres. The aforementioned 17 sustainable
development objectives include a variety of topics, including poverty eradication,
gender equality, rational consumption and production, decent work, economic
growth and others. (Afanasyeva et al., 2019).
Of course, each country has its own top priorities for sustainable growth, and if
we’re talking about Russia, then our country likewise has pressing issues that need
more attention. Within the framework of the sustainable development program, the
following are the important issues facing Russia that need to be discussed:
1. One of the problems is the extinction of monotowns. A monotown (city-forming
enterprises) is a city/town whose economy is dominated by a single industry or
company. The situation in many of Russia’s monotowns is highly problematic:
they are entirely dependent on the competitiveness of a single company or
factory. According to the research of the Center for Strategic Research Founda-
tion, there are 321 single-industry towns in Russia (Fig. 1), which is 8.7% of the
total population of the country (Center for Strategic Research Foundation, 2022).

T. Afanasyeva (✉) · E. Torgunakova · E. Torgunakov

Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 191
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_17
192 T. Afanasyeva et al.

Fig. 1 Industry structure of the city-forming enterprises of single-industry towns, according to the
research of the Center for Strategic Research Foundation, 2022

Fig. 2 Dynamics of the Gini Index in Russia %, 1995–2020, according to the research of the HSE,
2022 (Mareeva & Slobodeniuk, 2022)

Thus, one of the most important sustainable development goals in Russia is goal
11—achieving the sustainability of cities and communities.
2. Another problem is high level of income inequality among the population.
According to the research conducted by HSE, Russia has a high level of financial
inequality as measured by the Gini index (distribution of income by the popula-
tion as a whole) (Fig. 2) (Mareeva & Slobodeniuk, 2022).
Thus, one of the most important sustainable development goals in Russia is
goal 10—achieving the reduction of financial inequality.
3. The third issue is low life expectancy. According to the CIA World Factbook, the
average life expectancy in Russia is 71 years. For instance, the highest life
expectancy is in Monaco—89 years, and the lowest is the state of Chad—
Marketing Communications as a Tool for Sustainable Development. . . 193

50.6 years. Russia is ranked 152 in the total list of nations by life expectancy,
which has an impact on a number of sustainable development objectives, includ-
ing: goal 3—to promote health and well-being and goal 4—Good employment
and economic growth (CIA World Factbook, 2022).
4. Another problem is multiple educational reforms. If we look at the statistics of
Russian universities in the TOP 300 world universities of the Times Higher
Education rating, then in this rating you can see only 5 Russian universities (4).
The issue is particularly acute in the school education system, the Federal Law
“On Education in the Russian Federation” of 29.12.2012 N 273-FZ (last edition)
(5), adopted in 2012, caused a large-scale discussion in which more than 600,000
people participated. Nevertheless, the final version of the 2012 law did not
include almost any of the 40,000 proposals (Odegov & Garnov, 2019).
Thus, the issue of quality education is especially relevant for our country,
which corresponds to goal 4 of the sustainable development program
(Mirzajonov, 2021).
Based on the analysis, it can be concluded that the topic of sustainable
development is highly relevant for Russia. The following challenges are partic-
ularly crucial for enhancing sustainable development in Russia: attaining eco-
nomic growth, reducing financial inequality, obtaining health and well-being, and
achieving sustainability of cities and communities.

Materials and Methods

Sustainable development is extremely relevant for Russia, as was said in the

introduction of the article. Goals 11—attaining sustainability of cities and commu-
nities, 10—achieving a reduction in financial inequality, 3—health and well-being,
and 4—decent work and economic growth are particularly crucial for enhancing
sustainable development in Russia.
Increasing the socioeconomic standing of monotowns may be one strategy to
address the major issues in Russia that must be resolved in order to accomplish the
sustainable development goals.
In turn, the solution of this problem may have an impact on:
• sustainability of single-industry towns and society;
• improving the well-being of the residents of the regions;
• equalization of economic inequality;
• improving the quality and life expectancy of the Russian population (Kambur,
2021).
In order to achieve the major objectives of sustainable development in Russia, it is
crucial to focus on the socioeconomic development of monotowns. As was already
said, a monotown is a city whose economy is based mostly on one industry or
company.
194 T. Afanasyeva et al.

In general, Russian companies have become more and more focused on sustain-
able development objectives, particularly those that impact social and environmental
issues. For instance, the United Metallurgical Company presented a proposal to
lessen carbon footprint and gross greenhouse gas emissions at its facility in Vyksa,
Nizhny Novgorod region (Ageev, 2022).
Monotowns form the socio-economic situation in the city, the well-being of the
city’s population also depends on the level of their economic condition, therefore, an
important role is played by increasing the profits of these enterprises. It is important
to note that the company’s marketing strategy has a direct impact on the increase in
revenue. A marketing strategy is a business development plan that covers the factors
leading to an increase in profits.
Since modern society is interested in preserving the environment and improving
public welfare, enterprises of monotowns need to use a sustainable marketing
strategy. A company should apply sustainability as a way to meet the needs of
consumers and society today by utilizing market opportunities, internal resources,
consumer communication, and the protection and development of environmental
resources while keeping in mind the needs of future generation.
In order to achieve the goals of a sustainable marketing strategy, businesses can
use integrated marketing communications (IMC) to both draw in customers and
inform them about the environmental benefits of products, their effects on human
health, as well as their composition, use, and disposal.
IMC is the process of integrating, coordinating and combining the various
marketing and promotional elements to deliver the same and consistent marketing
message to customers and channels.
Consequently, marketing is an essential component of the business management
system within the context of sustainable growth. Furthermore, IMC elements are
crucial to a good sustainable business management system since they unify all
marketing communication operations (Pickton & Broderick, 2005).
The scientific community is aware of the problems that currently exist with the
use of marketing communications, including the potential for businesses to employ
different tactics to pursue sustainable development goals. The research was devel-
oped using the works of the following scientists and researchers: Bendas (2021),
Borchard G. (2018), Bormane S. (2018), Mirzajonov A. (2021), Nazaykin
A. (2020), and others.
The study’s hypothesis is based on the idea that employing efficient marketing
communications will positively affect the sales volumes of city-forming organiza-
tions, which will improve both their financial status and the socioeconomic situation
of the region as a whole (Kitchen & Proctor, 2015).
The purpose of the study was to search for effective marketing communications
that will allow achieving sustainable development of the organization in new, crisis
conditions. The study was conducted using the theoretical research and open-source
analysis method for the period from September 2022 to October 2022. In this article,
the following research questions were formed based on theoretical study and sec-
ondary data analysis in order to fulfill the article’s purpose:
Marketing Communications as a Tool for Sustainable Development. . . 195

1. To study the socio-economic situation of Russia’s single-industry towns in 2022.

2. To study the Russian marketing communications industry in 2022.
3. To determine the marketing strategies that Russian businesses will utilize the
most in 2022.
4. To identify which were the most effective channels of communication with
consumers in 2022, in general for companies.
Research methods used in this paper included the analysis of various documents and
laws, as well as economic-mathematical and structural-logical methodologies.

Results

The socioeconomic situation of towns with a single industry changed as a result of

the pressure of sanctions on Russia in 2022. International sanctions posed unique
hazards for Russian businesses that directly affect the socioeconomic status of
single-industry communities. It should be noted that although some of the city-
forming businesses were able to adjust to the current circumstances and showed
resistance to the short-term constraints, businesses with a significant share of foreign
capital were more vulnerable.
The biggest unfavorable effects for city-forming organizations can be seen in the
lay-off of employees, reduction of wages, and reduction of output, which leads to the
closure of organizations if they can’t adapt to changing market conditions. Currently,
a considerable number of industry support tools have been launched that are aimed at
stabilizing the situation in the most affected industries, but keep in mind that one
possible answer to this issue could be marketing communications. An organization’s
growth is directly strongly associated with its customers, the effectiveness of its
communication strategy, the channels of communication chosen, the target audi-
ence’s attributes, and whether the company’s information contains answers to
questions from potential customers.
Marketing communications are used to boost an organization’s sustainable devel-
opment, promote its products, services, and works, and make it more competitive.
Advertising, public relations, personal sales, and sales promotion tools are all
examples of marketing communications.
The association of Russian communication firms’ commission of specialists
estimates that the market for marketing communications will be worth more than
578 billion rubles in 2021. The study found that 68% of consumers are very willing
to purchase goods and services from companies that offer a convenient way of
communication (Association of Communication Agencies of Russia, 2022).
In 2022, Buman Media agency in cooperation with hh.ru conducted an annual
study of the most frequently used marketing communications by Russian companies.
More than 100 directors and communication specialists from companies in the
corporate sector participated in the study.
196 T. Afanasyeva et al.

Fig. 3 The most effective communication channels, according to Buman Media research, 2022

Russian businesses were in a crisis in 2022, and in order to retain their viability,
businesses had to find the best channels for reaching customers. The market for
communication services has undergone substantial changes. For instance, because
37% of respondents were unable to connect with their customers through overseas
social networks, 21% switched their SMM efforts to domestic social networks like
Telegram and VKontakte. Figure 3 displays data and trends in the area of marketing
communications (Fig. 3).
Based on the results of the research, it can be said that Russian businesses would
utilize mass media and Telegram channels the most frequently in 2022 for marketing
purposes (58% of respondents mentioned these communication channels). In com-
parison with 2021, these indicators were at the level of 45%, the increase was 13%.
Based on the Buman Media 2022 study, podcasts are among the least effective
communication channels, according to respondents as only 5% of respondents use
them as communication channels. In the course of the study, it was revealed that
37% of respondents, despite the large-scale transformation of the entire media
market, did not reduce communication with consumers through the media, as seen
by the information in Fig. 4.
Thus, anti-crisis marketing communications must be used in order to ensure high
organizational stability during the crisis, particularly to improve the competitiveness
and effectiveness of the city-forming organizations of single-industry towns.

Discussion

In the last year, there has been a general decrease in the stability of the work of city-
forming organizations, while it is the single-industry towns, the largest players in the
labor market, that determine the dynamics and stability of the overall
Marketing Communications as a Tool for Sustainable Development. . . 197

Fig. 4 Methods of communication with Mass Media in crisis conditions, according to Buman
Media research, 2022

Fig. 5 The impact of sanctions on city-forming enterprises, numbers of enterprises, according to

the research of the Center for Strategic Research Foundation, 2022

socio-economic situation in most single-industry towns of the country. The sanctions

pressure that intensified against Russia in 2022 inevitably affected the activities of
the city-forming organizations. It is vital to adapt the current marketing tactics of
businesses to the new environment in order to prevent potential risks, such as the
layoff of workers in the most affected industries, lower wages, decreased output, and
closure of organizations (Fig. 5).
The purpose of the study was to identify sustainable marketing strategies that will
enable organizations to develop sustainably in new, crisis conditions. The market for
communication services has undergone a substantial transformation, making it
impossible for Russian businesses to acquire effective pre-crisis marketing commu-
nications. As a result, anti-crisis communications are essential to ensuring
198 T. Afanasyeva et al.

organizations’ sustainable growth. One of the top concerns for businesses, particu-
larly in the corporate sector, is to find the most effective communication channels. It
should be emphasized that we must also keep in mind upgrading the content,
modifying the marketing approach, and selecting the right communication style
for the media.
The Buman Media agency did research on which communication goals will
increase the stability of business in a crisis phase, and the results were as follows:
• search for effective crisis communications—78% of respondents,
• search for adaptive channels of communication with consumers—74%,
• increase in the quality of internal communications—56%,
• formation and promotion of alternative content formats—48%.

Conclusion

Based on the conducted research, predictions about the communication industry

were made:
1. The focus on the socio-economic development of single-industry towns will
allow to cover the main goals of sustainable development in Russia. Since a
monotown is a place where one firm dominates the economy, the socioeconomic
structure of the city and the wellbeing of its residents are both influenced by the
economic condition of the city-forming organizations.
2. Organizations view the usage of marketing communication tools for sustainable
development as promoting social responsibility, environmental conservation, and
economic growth. In order to achieve the goals of a sustainable marketing
strategy, organizations can use marketing communications to both draw in
customers and inform them about the environmental aspects of products, their
impacts on human health, and their composition, use, and disposal.
3. According to the study, 68% of consumers are very willing to purchase goods and
services from organizations that provide efficient communication channels.
Therefore, it is clear that marketing communications have an impact on the
number of sales for the company.
4. The key goals in the area of marketing communications during the crisis that will
help achieve the Sustainable Development Goals include: the search for effective
crisis communications, the search for adaptive channels of communication with
consumers, the search for effective internal communications, and the develop-
ment and promotion of alternative content formats for communication with
consumers.
5. During the 2022 crisis, podcasts became the least effective means of communi-
cation for Russian businesses with their customers, while Telegram channels and
the media became the most effective.
The goal was attained and the research planned activities during the study were
completed. The initial hypothesis that the use of effective marketing
Marketing Communications as a Tool for Sustainable Development. . . 199

communications will have a positive impact on the sales volumes of city-forming

enterprises is supported by theoretical and empirical studies. This will be advan-
tageous for the enterprise’s financial situation as well as the socioeconomic
situation of the region as a whole.
Further steps in this study may be the analysis of new marketing tools and
technologies to improve the efficiency of city-forming enterprises in conditions of
sustainable development.

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Sustainable Development Policy
and Environmental Sustainability
in the Arctic Territories

Elena A. Borkova , Vladimir A. Plotnikov , Oleg G. Smeshko,

and Elena V. Ushakova

Introduction

Environmental problems and sustainable development, the transition to a green

economy model in modern conditions are of great importance (Agrawal, 2001;
Jänicke, 2012; Söderholm, 2020; UN, 2012; Stoenoiu, 2022; Szopik-Depczyńska
et al., 2018; Vertakova & Plotnikov, 2017). This is due to the expansion of the scale
of human economic activity to such limits that threaten the integrity and sustain-
ability of the natural environment (Bodrunov, 2021; Jacobson, et al. 2019). The
destruction of the environment adversely affects the socio-economic system. There-
fore, vigorous measures are needed to prevent the degradation of the human envi-
ronment (Vertakova et al., 2020; Zhang et al. 2020). The future of mankind depends
on their effectiveness.
Environmental protection and environmental management are global issues (Liu
et al., 2022). At the same time, these problems are regionally specific (Anthonj,
2021; Borkova et al., 2019; Yameogo et al., 2021). This is due to the differentiation
of territories in terms of economic, social, and environmental indicators, as well as
differences in the political regimes of different countries and regions. This problem
is especially significant in the Arctic regions, the nature of which is extremely fragile

E. A. Borkova
Saint-Petersburg State University of Economics, St. Petersburg, Russian Federation
V. A. Plotnikov (✉)
Saint-Petersburg State University of Economics, St. Petersburg, Russian Federation
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
O. G. Smeshko · E. V. Ushakova
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 201
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_18
202 E. A. Borkova et al.

(Plotnikov et al., 2018). Therefore, its preservation is a priority. It is important to

note the importance of the Arctic ecology in the active climate debate.
The Arctic is the “kitchen of the weather”. The ecological state of the Arctic
significantly affects the weather and climate of the entire planet (Steffen et al., 2018),
especially the Northern Hemisphere of the Earth. There is a change in climatic
conditions in the Arctic itself. For example, according to the UN (2019, p. 18), the
decrease in Arctic Sea ice from 1981 to 2010 ranged from 5.2% (observations in
March) to 27.5% (observations in September). This has led to numerous environ-
mental changes. For example, on average for the period 2009–2018, compared to
1993, the total sea level rise was 60 mm (Ibid.).
Russia is one of the largest Arctic powers. Therefore, environmental issues in the
Arctic occupy a large place in the economic policy implemented in Russia at the
national and regional levels (Agarkov et al., 2018; Carayannis et al., 2021; York
et al., 2022). At the same time, over the past two centuries, there has been an active
economic development of the Russian Arctic. This exacerbates social and environ-
mental problems in this macro-region. Despite the steps taken to implement pro-
grams for the integrated and nature-saving development of the Arctic territories, a
significant number of problems are manifested here that reduce the stability of the
socio-ecological and economic system of the Russian Arctic. Their study is the
subject of analysis in the author’s study.

Materials and Methods

The author’s research methodology is based on the theory and concept of sustainable
development. During the study, methods of processing statistical data, institutional
analysis, literature review, case method, method of expert assessment of trends were
used. The choice of these research methods is determined by a number of circum-
stances. First, there are relatively few systematic data on the sustainable develop-
ment of the Arctic zone of the Russian Federation. Secondly, there is an opportunity
to use the experience of other Arctic states in Russia. Thirdly, special tools of
economic, environmental and social policy are used in the Arctic macro-region,
which requires additional institutional analysis. Fourth, in achieving the Sustainable
Development Goals in the Arctic, civil initiatives are of great importance.
The essence of sustainable development is to ensure social and economic pro-
gress and the growth of the well-being of the present generation of people without
compromising the quality of life of future generations. That is, stability is considered
in a dynamic aspect. Achieving sustainability requires the harmonization of pro-
cesses in the economic, social, and environmental spheres. This is reflected in the
system of Sustainable Development Goals adopted by the United Nations. The goals
of sustainable development are disclosed in a set of specific tasks that cover various
components of the functioning of mankind, both socio-economic and natural.
The situation with the solution of environmental problems in the framework of
achieving the Sustainable Development Goals is quite controversial. According to
Sustainable Development Policy and Environmental Sustainability in. . . 203

the United Nations Environment Program (UNEP, 2019), only 23% of the environ-
mental indicators of the Sustainable Development Goals show progress. There is
insufficient data for 68% of the indicators, because missing statistical information.
For 9% of the indicators there is no progress. This situation with the provision of
statistical information to make estimates forces researchers to turn to empirical data
and interpretation of the facts available for study. These facts and empirical data, as a
rule, are not exclusively environmental in nature. They comprehensively character-
ize efforts to achieve the Sustainable Development Goals.
Therefore, it is fair to talk about the need to achieve socio-ecological and
economic sustainability. That is, sustainability has three main components, each of
which is important separately. At the same time, all these elements have a significant
influence on each other. The concept of sustainable development was first formally
formulated in 1987 in the “Our Common Future” report (Brundtland Report) (UN,
1987). Since then, this concept has not changed significantly. At the same time, it is
regularly updated and supplemented both at the official level and in scientific
research (Khan et al., 2021; Moldavska & Welo, 2017; Mizutori, 2019; Porfiryev
& Bobylev, 2018). Conceptually, sustainable development is development that
meets the needs of the present without compromising the ability of future genera-
tions to meet their needs.
The problem of sustainable development is closely related to the problem of
intergenerational justice and the global responsibility of humankind. The state, as a
central public institution, is the spokesman for national interests. Therefore, the
solution of these problems should be entrusted to the state. This does not exclude
active participation in solving the problems of sustainable development of business,
local communities, civil society institutions, and active citizens. But without coor-
dination of the efforts of these actors on the part of the state, these efforts may turn
out to be ineffective.

Results

The Arctic occupies a special place in the system of ensuring the strategic national
interests of Russia in the field of economy, transport, environmental protection,
innovation, defense, and geopolitics. This is confirmed by the presence of special
normatively established norms of legal regulation in this macro-region. In particular,
in recent years, Russia has adopted Decree of the President of the Russian Federation
of March 5, 2020 No. 164 “On the Fundamentals of the State Policy of the Russian
Federation in the Arctic for the period up to 2035” and Decree of the President of the
Russian Federation of October 26, 2020 No. 645 “On Strategies for the Develop-
ment of the Arctic Zone of the Russian Federation and Ensuring National Security
for the Period up to 2035”. In these documents, special attention is paid to the issues
of ecology and nature management.
Thus, in the “Fundamentals of the State Policy of the Russian Federation in the
Arctic for the period up to 2035”, among the main national interests of the Russian
204 E. A. Borkova et al.

Table 1 Investments in fixed capital for environmental protection and rational use of natural
resources in the Arctic zone of the Russian Federation (million rubles, in actual prices)
Indicator 2017 2018 2019 2020 2021
Total investment 25,962 26,104 34,714 22,878 99,352
Including for the protection
Atmospheric air 18,873 21,393 23,042 16,457 71,236
Water resources 2967 2046 4990 3356 7264
Lands 767 395 2650 1216 18,424
Source: Rosstat, https://rosstat.gov.ru/storage/mediabank/calendar1_2022.htm

Federation in the Arctic, “environmental protection in the Arctic” is named; among

the main threats to national security in the Arctic is “unavailability of the environ-
mental monitoring system, located in the Arctic zone of the Russian Federation, to
environmental challenges”. In this regard, among the main directions of the imple-
mentation of the state policy of the Russian Federation in the Arctic, “environmental
protection and ensuring environmental safety” are singled out. The implementation
of this policy, as stated in the “Strategy for the development of the Arctic zone of the
Russian Federation and ensuring national security for the period up to 2035”, should
be carried out considering the characteristics of the Arctic zone. These include:
“extreme natural and climatic conditions, high sensitivity of ecological systems to
external influences, climate changes that contribute to the emergence of both new
economic opportunities and risks for economic activity and the environment”.
Increasing attention to environmental aspects in the Arctic zone of the Russian
Federation is manifested in the implementation of major environmental projects in
this macro-region. For example, until recently, Russia and Norway have been
working together on projects to clean up the Arctic regions of the North-West of
Russia from accumulated pollution (ROSATOM, 2020). Special facilities were built
in the sea bays of Saida, Andreeva and Gremikha for the management of radioactive
waste and spent nuclear fuel. As a result, the total radioactivity of waste stored, for
example, in Andreeva Bay, has decreased by a third. It was expected that this work
would be completed in 2023, but the aggravation of the political and economic
confrontation between Russia and the “Western world” in 2022 may shift these
dates.
The implementation of these and many other projects requires large-scale
funding. Specific environmental costs in the Arctic zone significantly exceed the
average Russian indicators. According to the Federal State Statistics Service
(Rosstat), the share of investments in fixed assets made for the protection and
rational use of natural resources in total investments in fixed assets made in the
Arctic zone of the Russian Federation, as of 2021, amounted to 5.3% with the
Russian average is 1.7% (source: https://rosstat.gov.ru/storage/mediabank/calen
dar2_2022.htm).
Investments in fixed assets aimed at protecting the environment and rational use
of natural resources in the Arctic zone of the Russian Federation are continuously
increasing. This indicator is shown in Table 1. Table 1 shows that only in 2020 there
Sustainable Development Policy and Environmental Sustainability in. . . 205

Table 2 Indices of Gross Domestic Product per capita in the Russian Federation, %
Indicator 2017 2018 2019 2020 2021
As a percentage of the previous year 101.7 102.8 102.2 97.5 105.2
As a percentage of the base (2016) year 101.7 104.6 106.9 104.3 109.7
Source: Rosstat, https://rosstat.gov.ru/statistics/accounts

Table 3 The share of the value added of high-tech and knowledge-intensive sectors of the
economy in the gross regional product of the territories of the Russian Federation, %
Territory 2016 2017 2018 2019 2020
All regions of the Russian Federation 19.7 19.6 18.5 19.0 20.7
Arctic zone of the Russian Federation 7.5 7.1 6.8 6.2 8.7
Source: Rosstat, https://rosstat.gov.ru/storage/mediabank/calendar2_2022.htm

was a decrease in investment, which was due to the general decrease in the level and
change in the structure of economic activity due to the crisis caused by the Covid-19
pandemic.
The dynamics of Russia’s GDP is shown in Table 2. From the data in Table 2, in
2020 the Russian economy experienced a recession. This decline was driven by the
impact of the Covid-19 pandemic. Also, fluctuations in investments in environmen-
tal protection and rational use of natural resources are because these investments are
of a project nature. Therefore, they cannot be constant or grow at a constant rate.
Their value depends on the implementation of specific environmental projects.
Due to the peculiarities of the circulation of air masses in the Arctic, pollutants,
gaseous and aerosol impurities accumulate in its atmosphere. The main environ-
mental threats in the Arctic zone of the Russian Federation are associated with an
increase in pollution and degradation of environmental components in the face of a
growing anthropogenic load due to the active development of natural resources and
the development of the infrastructure of the Northern Sea Route. Low transport
accessibility leads to the accumulation of waste. In addition, an important environ-
mental risk factor in the Russian Arctic is the relatively low technological level of
production facilities located in this macro-region (Table 3).
Therefore, the implementation of sustainable development policy in the Russian
Arctic should be aimed not only at the construction of treatment facilities, elimina-
tion of pollution, etc., but also at increasing the level of manufacturability of
production, stimulating innovative development. Innovations in the Arctic are not
only economic, but also of great social and environmental importance. Unfortu-
nately, they have not yet received enough attention.
The share of domestic costs for research and development carried out in the Arctic
zone of the Russian Federation in the all-Russian indicator in 2021 was only 0.5%;
the same share of the Arctic zone in domestic research and development costs in
Russia (source: https://rosstat.gov.ru/storage/mediabank/calendar2_2022.htm). At
the same time, the share of the gross regional product of the territories of the Arctic
zone in the all-Russian indicator is an order of magnitude higher (Table 4). This
206 E. A. Borkova et al.

Table 4 The share of the Gross Regional Product produced in the Arctic zone of the Russian
Federation in the total Gross Regional Product of the constituent entities of the Russian Federation,
%
2014 2015 2016 2017 2018 2019 2020
5.0 5.2 5.4 5.8 5.9 6.1 6.0
Source: Rosstat, https://rosstat.gov.ru/storage/mediabank/calendar2_2022.htm

indicates the presence of significant reserves of innovative development in the

territories of the Arctic zone of the Russian Federation.

Discussion

The economy of the territories of the Arctic zone of the Russian Federation is largely
based on the mining industry. The natural resources of the Arctic have not yet been
sufficiently explored; nevertheless, their extraction and enrichment are not only of
national, but also of global importance. The mining industry is a source of environ-
mental harm. The key areas of environmental pollution during mining are pollution
from accidental oil spills, emissions from the burning of associated petroleum gas,
the alienation of large areas during the extraction of solid minerals, pollution of
water bodies with waste, etc. These pollutions negatively affect the fragile Arctic
ecosystem.
For example, for many years, compounds of manganese, aluminum, nickel, iron,
mercury, copper, molybdenum, etc. have been polluting elements in the waters of
small rivers of the Kola Peninsula. The greatest negative impact on the quality of
water in the reservoirs of the Murmansk region is produced by wastewater from the
mining, mining, and metallurgical industries: the Belaya River and Lake Bolshoy
Vudyavr are polluted by the Apatit production association, the Khauki-Lampi-Yoki
River and the Nyuduay River are polluted by the Kola Mining and Metallurgical
Company, etc. Thus, the Niuduay River is especially polluted with nickel and zinc
compounds, the maximum number of cases of extremely high pollution—16 and
high pollution—19 were detected in the Niuduay River with compounds of copper,
sulfates, nickel, and mercury during monitoring in 2020.
There is an obvious need to increase investment in the construction of treatment
facilities, the introduction of more advanced technologies at the enterprises of the
Arctic, as well as the launch of regional and national environmental programs to
clean up territories and water bodies from various pollution. In addition, it is
necessary to strengthen climate monitoring, including with the involvement of
international resources. Permafrost is melting, releasing significant amounts of
greenhouse gases. The melting of polar ice affects the climate not only in Russia,
but also in Eurasia as a whole, and initiates global climate change.
It is difficult to solve environmental problems by the efforts of only state
institutions. World experience speaks of the need to involve active citizens and
Sustainable Development Policy and Environmental Sustainability in. . . 207

non-governmental organizations in this. For example, since 2010 the Russian

Geographical Society has been supporting the project “Cleaning the Arctic”. As
part of its implementation, only in 2011–2012 on the island of Alexandra Land,
which is part of the Franz Josef Land archipelago, 47.5 thousand steel barrels with a
total weight of 1892 tons were collected, cleaned, and pressed. 1744 tons of fuel and
lubricants were drained and moved to temporary storage. Collected and processed
4119 tons of scrap metal and 4797 tons of other solid waste.
As part of the Clean Arctic project, during 2022, over 3000 tons of waste were
collected and disposed of by volunteers throughout the Arctic zone of the Russian
Federation from Murmansk to Anadyr. This is double the figure for 2021. About
1500 volunteers participated in the project. The implementation of the project is
supported by federal and regional authorities. At the same time, not only the goal of
cleaning the Arctic territories and water areas from various pollution is achieved, but
also a vast social stratum of people with an active life position, committed to the
ideas of sustainable development, is being formed. The goal may be the creation of
self-learning online communities of such civil activists.
Environmental education and environmental education are also important tasks in
achieving sustainable development. The issue of mandatory environmental educa-
tion is debatable in Russia. The education standards established by the state for
Russian schoolchildren do not contain the discipline “Ecology”. It was introduced in
1993, but 4 years later, in 1997, this academic discipline was excluded from the
federal component of the curriculum. Today it is taught only in the senior (10–11)
grades as an optional academic discipline. Despite the activity of enthusiasts in this
matter, their efforts are not systematic.
In the current edition of the Federal State Educational Standard for Basic General
Education, among the results of mastering the main educational program, it is
envisaged that “the formation of the foundations of ecological culture”. This forma-
tion should take place within the framework of the academic disciplines “Geogra-
phy”, “Physics”, “Biology”, “Chemistry”, “Technology”, “Fundamentals of Life
Safety”. The current version of the Federal State Educational Standard of Secondary
General Education among the results of the development of the main educational
program provides for “the formation of environmental thinking, understanding the
impact of socio-economic processes on the state of the natural and social environ-
ment”. These results are expected to be obtained within a significant number of
academic disciplines.
The high importance of the environmentally responsible behavior of the popula-
tion of the Arctic territories makes it expedient to introduce into the school educa-
tional programs special academic disciplines related to the achievement of the
Sustainable Development Goals and environmental activities, considering the spe-
cifics of the Arctic. To solve this problem, as well as to intensify environmental
education, it is advisable to attract the scientific and educational potential of univer-
sities and research institutes located in the Arctic zone of the Russian Federation.
208 E. A. Borkova et al.

Conclusion

The concept of sustainable development has been developed for a long time. It
originates from the “Our Common Future” report (Brundtland Report), prepared for
the UN in 1987. For its successful implementation and implementation in the
implemented at various levels (international, national, regional, local) UN policy,
the Sustainable Development Goals were developed. The sustainable development
policy has national and regional specifics. While sustainable development involves
balancing the economic, environmental, and social aspects of development, these
aspects may have different situational priorities in specific contexts.
The article analyzes the specifics of the sustainable development of the Arctic
territories. Russia is one of the largest Arctic powers. Therefore, environmental
issues in the Arctic occupy a large place in the economic policy implemented in
Russia at the national and regional levels. “Fundamentals of the State Policy of the
Russian Federation in the Arctic for the period up to 2035” and “Strategies for the
Development of the Arctic Zone of the Russian Federation and Ensuring National
Security for the Period up to 2035” are adopted in Russia. In these documents,
special attention is paid to the issues of ecology and nature management. But there
are significant problems with maintaining the ecological balance in the Russian
Arctic.
It is shown that the fragility of the northern nature and the high level of influence
of the Arctic on the ecology of the Earth as a whole, on global climate change, leads
to the situational priority of the ecological aspect. Measures were developed to
achieve the environmental sustainability of the territories of the Russian Arctic,
considering the peculiarities of the institutional regulation of the development of the
Arctic zone of the Russian Federation. According to the results of the study, it was
proved that it is necessary to synchronize this regulation at the levels: international,
national, regional, local. This requires significant amounts of funding and other
resources. Therefore, it is advisable to involve large corporations, such as
ROSATOM or mining corporations, in solving these problems.
Mining corporations are actively working in the Russian Arctic. They are inter-
ested in the sustainable development of this macro-region. Therefore, additional
incentives should be created for investment in wastewater treatment plants and the
introduction of innovative environmentally friendly technologies. The authorities
and the public should monitor the climate and the environmental situation. Sustain-
able Development is of high social importance. Therefore, it is necessary to develop
environmental movements and increase the civic activity of the population.
Based on the results of the analysis, a lack of systematic statistical data on the
Arctic zone of the Russian Federation was noted. It is proposed to organize moni-
toring and systematization of the available empirical data. The need to introduce
innovative technologies in the industry of the Russian Arctic was highlighted as one
of the priorities, and emphasis was also placed on the construction of treatment
facilities and the implementation of initiatives to clean up the Arctic territories and
waters from pollution. The condition for the implementation of the proposed
Sustainable Development Policy and Environmental Sustainability in. . . 209

measures is the activation of environmental education and enlightenment, as well as

the involvement in environmental projects not only of official bodies and businesses,
but also of civil society institutions and environmental activists.

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Principles of Ecological and Economic
Management of Innovative Development
of Heat Supply

Valeriya V. Glazkova

Introduction

Today’s trends in the world development clearly point to the need of transfer from
technocentric to ecologically sustainable economy which requires serious revision of
its priorities at both macro- and micro levels. The issues of “environmental business
feasibility” were raised in the 1970s following the UN Conference in Helsinki
(1972) due to endeavors of the World Commission on Environment and Develop-
ment headed by Prime Minister Gro Harlem Brundtland of Norway (Brudtland
Commission). Twenty years later the Chambers of Commerce and Industry (Busi-
ness and Environment Program) initiated implementation in entrepreneurship its
Sixteen Guidelines for Responsible Care in Environmental Protection and Safety. In
a parallel track, the European Union developed the principle of “shared responsibil-
ity” which was also aimed at stimulating entrepreneurs to reduce their environmen-
tally negative or adverse activities. All those initiatives had one essential
commonality—they stimulate voluntary rather than enforced commitment of busi-
ness to sustainable environmentally friendly activities. In fact, for environment-
caring organizations these initiatives appeared to be environmentally appropriate
and economically cost-effective rather than charitable, thus, resulting in their eco-
logical and economic sustainability in operating and development (Dyllik, 1994).
The present study is focused on the operation efficiency of the unified heat supply
enterprises or networks in Russia. According to Rosstat, by 2020 heat losses in the
supply networks increased by 2.51 times compared to 1995, with the share of those
requiring replacement amounted more than 30% of the total length of the country’s
heat networks (Štreimikienė et al., 2020). It is obvious that measures aimed to reduce

V. V. Glazkova (✉)
Moscow State University of Civil Engineering (National Research University), Moscow,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 211
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_19
212 V. V. Glazkova

the wear and tear of the equipment and, thus, stimulate increase in the efficiency and
energy security of the national heat supply industry require overall large-scale
modernization of its production assets and infrastructure (Bezhan, 2020). By the
federal law, modernization and innovative development of the heat supply networks
in the assigned district or territory is the responsibility of the unified heat supply
enterprises (UHSE) or district heating systems (DHS) (Astratova et al., 2021),
therefore, this study is focused on the role of these entities in the sector trans-
formations (Stennikov & Penkovskii, 2020).
Providing that environmental safety of functioning and development being
observed, the main priorities of the industry modernization and innovative develop-
ment are better economic performance and reliability of heat supply (Štreimikienė
et al., 2020). Therefore, economic benefits of interaction between ecological and
entrepreneurial goals could be achieved through integrating environmental care with
resource-saving methods of management, innovative technologies and products
(Verstina et al., 2021). This research paper describes methodology and basic prin-
ciples of environmental and economic management (EEM) which can be used by the
unified heat supply enterprises or district heating systems for their innovative
development.

Materials and Methods

Fundamentally, transition of business to ecological and economic balance in oper-

ations is based on realizing the interdependence between commercial activities and
care for natural environment as both an opportunity for and a threat to its economic
growth. The latter is connected with the system of environmental restrictions
resulting from the exhaustion of natural resources, low reproduction of renewable
resources, and limited assimilation capacity of the environment, that is, its poor
ability to neutralize the negative impact of economic activities leading to serious
damaging changes and loss of sustainability. On the other hand, according to
T.A. Akimova, A.P. Kuzmin, V.V. Khaskin, environmental restrictions can be
used as an additional tool rather than a barrier for monitoring the production
efficiency (Ilyicheva, 2010). In such a way, commitment of business to ecological
and economic balance in functioning may result in its shift to ecological and
economic development and, therefore, to managing this development (Borodin,
2007). Thereby, companies will get not only an effective method to evaluate
environmental safety of their activities together with an opportunity to inform
stakeholders about these priorities but also an additional competitive advantage
demonstrating their commitment to the concept of sustainable development (May-
orova, 2019).
According to A.I. Borodin, with environmental issues being considered, compa-
nies have to revise their traditional managerial techniques focused on economic
results within existing environmental management framework in favor of a new
Principles of Ecological and Economic Management of Innovative. . . 213

integrated environmental and economic management approach which may result in

reducing production costs due to less environmental damage (Borodin, 2005).
Actually, there is no an unambiguous interpretation of ecologically oriented
management in today’s studies on economy. Ecological orientation in business is
connected either with the concept of EEM or with that of environmental manage-
ment and environmental protection (P. Welford, A. Guldson, W. Hopfenberg,
E. Schultz, etc.). Thus, it makes sense to distinguish between these concepts and
their substantive characteristics, and state that the concepts of “ecological manage-
ment”, “environmental management”, and “nature management” (used synony-
mously in Russia) should be considered within the framework of environmental
governance, aimed to develop and implement principles of ecological management
and environmental safety at all levels of governance. This state policy is
implemented at the levels of public administration (federal and regional) and munic-
ipal management. In addition to the territorial level of environmental governance,
there are also industry or sectoral levels, where requirements to eco-aims and pro-
grams are initiated by various groups of external stakeholders (legislative and
executive authorities, representatives of counterparties, organizations, local commu-
nities) and by the interests of new generations. Thus, environmental management is
defined by some researchers (T.A. Guseva, E.A. Khachaturov, S.V. Makarov,
E.A. Zaika, M.V. Khotuleva) as “the activities of state bodies and economic entities
mainly aimed at complying with the mandatory requirements of environmental
legislation, and, therefore, at developing and implementing relevant goals, projects
and programs” (Guseva et al., 1999).
As a rule, business entities as objects of low or municipal level of management
implement their ecological approach in compliance with the goals of municipal
programs. However, environmental management, as noted above, is associated
with the administrative impact on the objects at different levels, including existing
restrictions and barriers to the interrelation. Because this study is aimed to find the
most effective way for organizations to consider environmental issues in their
operating activities, the term “ecological and economic management” would be
more appropriate for use than such terms as “ecological management” or “environ-
mental management”. Environmental management is aimed to control air emissions,
the discharge of pollutants into water bodies, consumption of energy and raw
materials and environmental consequences of production. Realized as control “at
the output” these activities neutralize pollution at the last stage of the production
cycle (at the “end of the pipe”). Ecological and economic management permeates all
subsystems of enterprises and stimulates development and efficient flow of their
resources to achieve economic goals interrelated with those of environmental man-
agement and sustainable environmental development. Therefore, according to
A.I. Borodin, “ecological and economic management can be described as a compre-
hensive and long-term integration of environmental issues into economic policy”
(Borodin, 2005).
214 V. V. Glazkova

Results

Summarizing various approaches to the content of ecological and economic man-

agement, it is advisable to highlight the subject area of this type of management,
including considering it in the aspect of the object of this study—unified heat supply
organizations (Table 1):
The author’s classification of general and specific principles of ecological and
economic management is presented in Fig. 1.
It should be noted that the EEM principles listed in Fig. 1 are also valid for the
unified heat supply enterprises or district heating systems in terms of their innovative
development.

Discussion

The systemacity principle considers interaction between all the internal organiza-
tional subsystems (elements) and the impact of the external factors. In Russia the
idea of a systematic approach to management was formulated by A.A. Bogdanov in
his work “Tectology: a general organizational science” at the beginning of the
twentieth century. According to the author, when applied to the system study and
analysis, organizational perspective allows researchers to understand the intercon-
nection between its internal components as well as its interrelations with the external
environment. Another researcher and the author of “General System Theory”,
“Modern Theories of Development”, “Robots, Men, Minds”, etc. Ludwig von
Bertalanffy is also recognized as one of the founders of general systems theory
(GST). Having started with the study of biological organisms as separate systems the
Austrian biologist transferred his systems theory to the social environment. The
studies resulted in the development of a systemic approach basics according to
which any system is composed of interrelated and interdependent elements. When
interacting they form a unitary whole which exists according to certain laws and
principles explaining the behavior and the functioning of various systems. The ideas
of L. von Bertalanffy were further developed by Hans Peter Ulrich, Fredmund Malik
and Anthony Stafford Beer, the researchers of the St. Gallen School of Management
(Switzerland), who applied the systemic approach to management. Later the School
follower Russell L. Ackoff contributed to the approach by developing his concept of
purposeful systems and ideas on modelling such systems (Ovchinnikova &
Artyomov, 2013).
A systemic approach was enhanced due to the theoretical and practical studies
organized by different groups of researchers and scientists from Russia and other
countries—A.I. Berg, M.I. Setrov, V.G. Afanasyev, B.Z. Milner, Richard
A. Johnson, Fremont E. Kast, James E. Rosenzweig, Jacqui Smith, John P. van
Gigch, Peter Senge, Christopher Meyer, Stan Davis, Jamshid Gharajedaghi and
others.
Principles of Ecological and Economic Management of Innovative. . . 215

Table 1 The subject area of ecological and economic management of the development of unified
heat supply organizations (compiled by the author)
EEM is the approach that implies creating, activating and mobilizing organizational resources to
achieve their economic objectives interrelated with those of rational environmental management
and protection. With regard to the development of unified heat supply organizations, it implies the
formation and movement of resources such as personnel, knowledge, finance, information and
technology to increase the competitiveness of a unified heat supply organization, increase the
efficiency of its functioning, as well as integrated development in order to ensure high-quality and
reliable heat supply in a fixed territory in the most economical and environmentally friendly way.
Goal Coordination and integration of the ecological and economic component of a
unified heat supply organization to increase the efficiency of its activities and
ensure high-quality, reliable and environmentally safe heat supply in the assigned
territory.
Tasks 1. Development of ecologically oriented policy (objectives, principles of oper-
ating, rules of conduct/ behavior, etc.) in accordance with the desired organiza-
tional changes in operational activities and care for the environment. When
forming the organizational structure of a unified heat supply organization, it is
necessary to take into account the peculiarities of production processes in the field
of heat supply: the simultaneity and continuity of the processes of production,
transmission, distribution and consumption of heat, the impossibility of storing
heat, which determines the dependence of its production in accordance with
changes in consumption volumes during the year depending on climatic condi-
tions, the impossibility of product rejection and withdrawal from consumption,
what makes unified heat supply organizations responsible for the constant quality
of heat supply in the assigned territory
2. Formation of methodological foundations and tools for ecological and eco-
nomic management of a unified heat supply organization, including the devel-
opment of an organizational and economic mechanism for ecological and
economic management of unified heat supply organizations, as well as the
formation of a system of administrative, economic, socio-psychological and
ideological methods.
3. Development of a system of indicators and indicators reflecting the commit-
ment of a unified heat supply organization to the principles of ecological and
economic management, which include determining the level of environmental
innovation in the organization, specific fuel consumption for released electrical
and thermal energy, the coefficient of completeness of resource use, the amount
of emissions of harmful substances into the environment, ensuring waste-free
production through a closed technological cycle of resource processing and
others.
4. The formation of a system for assessing and monitoring EEU risks by an
organization represented by a consistent list of actions, starting from the identi-
fication of risk in a certain management situation, ending with the impact on risk
and localization of its consequences.
Object Unified heat supply organization
Subject Production and economic activity of unified heat supply organizations
Methodology A set of strategic, operational and tactical management methods of a single heat
supply organization
Functions Planning of the strategy and policy of the functioning and development of the
organization, interconnected with the goals of environmental and sustainable
development. A prerequisite should be the creation of a strategy for the devel-
opment of a unified heat supply organization, which, firstly, should take into
(continued)
216 V. V. Glazkova

Table 1 (continued)
account the principles of ecological and economic development, and secondly,
integrate as the goals of ecological and economic management of the organiza-
tion, positioning itself as an entity taking care of the environment and trying to
minimize the negative impact on it during its operation and development, as well
as the goals of the overall development of a single heat supply organization.
Organization of production and economic activities of the organization, taking
into account the reduction of the load on the environment.
Coordination of subsystems of the organization with different goals and objec-
tives within the framework of ecological and economic management of the
organization
Monitoring the achievement and implementation of indicators and indicators
reflecting the organization’s commitment to the principles of environmental and
economic management.
Motivation of personnel related to the development of responsibility of
employees engaged in environmental activities. The principle of environmental
safety, which is laid down in the strategic goals of the development of a unified
heat supply organization, should be shared, first of all, by the employees of the
organization. This is expressed through the norms and patterns of behavior of the
organization’s employees, which are formed due to its corporate culture.
Key issues Ecological and economic management (EEM)
• is considered as a comprehensive and long-term integration of environmental
issues into the economic policy of the unified heat supply organization;
• the environmental activity of a unified heat supply organization should be based
on its own initiatives and go beyond the exclusive implementation of legislation;
• is comprehensive in terms of organizational subsystems;
• focuses on the environmental issues, public interests and market conditions.

The systemic or systems approach is based on the concept of a system. However,

due to the specifics of the object under study its definition may require clarification in
addition to the basic characteristics of a system. Despite the great diversity of views,
all researchers agree that any system is a set of interrelated and interdependent parts
(elements or processes) vitally important for the existence and functioning of the
unified whole they produce.
Further analysis of the efforts aimed to define a system allows to distinguish
between the broad and narrow definition of a systemic approach. According to the
former, the object is studied as a system of interconnected elements together with
their interrelations and the links between the object and its external environment.
According to the latter, a systemic approach presents “a method of scientific
cognition and practical activity which is based on the study of an object as a complex
holistic socio-economic system” (Ovchinnikova & Artyomov, 2013).
As a universal methodology a systemic approach allows to scientifically substan-
tiate the structure of natural objects, organizational and production systems, and the
laws under which they function and develop. In management the systemic approach
is applied to the study of an organization as a system. According to the systems
management theory, an organization consists of multiple interrelated parts or com-
ponents that work harmoniously and may function either as subsystems within the
larger system of a higher order (external environment) or as a system for the smaller
Principles of Ecological and Economic Management of Innovative. . . 217

General EEM principles Specific EEM principles

comprehensiveness and
systemacity environmental soundness of
ecological management decisions

strategic functional integration

importance
minimisation of negative
consistency environmental impact

sustainable/ rational use of natural

responsibility resources

risk management
controllability
cooperation with environmental
stakeholders
reliability
environmental transparency
lawfulness
ecological motivation and
economic involvement
effectiveness and
efficiency
preventability and timeliness

Fig. 1 Principles of ecological and economic management (compiled by the author)

subsystems of a lower order (internal environment). However, while interacting with

and depending on the external environment organizations operate within their
boundaries as open systems. Internally, close links between subsystems facilitate
organizational cooperation and interaction, which results in positive synergies.
Unfortunately, though useful scientifically in the studies on organizational man-
agement, a systemic approach cannot help in evaluating the contribution of various
subsystems into the overall efficiency of management processes. Some researchers
characterize this approach as poorly formalized and, therefore, as another way of
thinking rather than as a new methodology which provides particular research tools
and action algorithms (Altshuler et al., 2010). However, the system analysis that is
used as a basis for a systemic approach may provide rules for organizing this new
way of thinking in management. This analysis implies the study of objective laws of
systems’ development and focuses on disclosing the integrity of the object. Thus, the
systemic approach characterizes a new stage in developing methods of cognition,
research and system construction, as well as a new way of describing and analyzing
218 V. V. Glazkova

natural or artificially created objects, with systemacity being applied to innovative

development as a general EEM principle.
Another general EEM principle for innovative development based on the key role
of goal-setting in organizational integrity (Peter Drucker and Chester Barnard) is
strategic importance. On the one hand, as it was mentioned above, unified heat
supply enterprises are involved in the long-term planning and innovative develop-
ment of heat supply networks on the territory assigned. On the other hand, clear
strategy and objectives of the EEM should be in compliance with the ecologically
favorable economic development. In addition, strategic management prioritizes a
timely response to changes in the external environment, which A.I. Borodin
describes as development of the environmental portfolio with a set of environmental
strategies, eco-activities and measures aimed to reduce the negative effects on the
environment. According to Thomas Dyllick, the most essential eco-efficient strate-
gies include reducing resource consumption, recycling, using environmentally
friendly technologies, producing eco-effective products and services, avoiding,
reducing or eliminating pollution due to environmental technologies, and searching
for eco-friendly opportunities to satisfy consumers’ needs (Dyllik, 1994). It should
be noted that coherence and efficiency of decision-making in short to long terms are
ensured due to the specific EEM principle of comprehensiveness and environmental
soundness of ecological management decisions.
Any goal-setting system should always consider all the immediate and long-term
effects of possible decisions and, thus, it requires prioritizing all the tasks to be
solved. In this way, operation and development of UHSE or DHS is ensured by the
compliance of the EEM with the principle of consistency.
The principle of responsibility, formulated earlier by Fayol in his theory of
administration, implies the building of a clear management structure and a system
of subordination. With regard to еру EEM, this principle requires a balanced
responsibility of organizations and employees towards the ecological dimension of
their activities and development. Researchers define environmental spheres as a
result of integrating the EEM into the company’s model of management. According
to A.I. Borodin, when choosing between the basic management models, such as
Management by Objectives, the Harzburg Management Model, Likert’s manage-
ment systems, and the St. Gallen Management Model, the latest one is turned to be
the most appropriate for integrating the EEM components, with both the economic
efficiency and environmental care taken into account (Borodin, 2005). While the
principle of responsibility implies that environment protection is given the highest
priority within the system of business goals, the principle of controllability requires
development of an appropriate management structure which ensures ecologically
harmless business operation. Finally, integration of management by ecological
objectives with the goals of organizational development is carried out in accordance
with the EEM principle of functional integration. This integration means a close
interaction and interpenetration of the organization’s management structure and the
structure of its ecological and economic management, and the subordination of all
the organizational processes and spheres of environmental activities to the goals of
minimizing the negative impact on the environment (Borodin, 2005).
Principles of Ecological and Economic Management of Innovative. . . 219

The obvious discrepancy between the endless possibilities for the social wealth
development and the limited compensatory potential of the biosphere might be
solved if the society assumes its responsibility for ensuring the recovery nature’s
capacity (Belik, 2013). In this context innovative development of the unified heat
supply enterprises or district heating systems should be exercised in conformity with
the principle of minimization of negative environmental impact and the principle of
sustainable/rational use of resources as specific EEM principles. Under minimizing
the negative impact on the environment most businesses understand “the purposeful,
motivated and consistent, from year to year, changes in the gross and specific
indicators of discharges and emissions of pollutants, industrial waste and resources
used, and changes in product environmental performance, which are achieved
through the use of a set of various innovative organizational, technological and
technical methods and tools” (Subbotina, 2008).
One of the functions of environmental and economic management is monitoring
the performance and achievement of the indicators which confirm organizational
commitment to the EEM principles. To ensure accuracy and prevent distortion of
information in decision making the function is implemented in accordance with the
EEM general principle of reliability.
Though actual environmental activity traditionally depends only on the business
initiatives and may go beyond the minimum requirements of ecological legislation, it
is the EEM general principle of lawfulness which ensures that preventing negative
impact on the environment is mandatory for operation and development of every
company.
It is reasonable to emphasize that the EEM is analyzed here as the approach which
allows organizations to align their economic targets with the goals of rational
environmental management and protection rather than the ecology led management.
Application of the EEM general principle of economic efficiency is aimed to regulate
this provision. The EEM specific principle of risk management allows to consider
economic risks while ensuring innovative development of the UHSE or DHS, with
entrepreneurial goals being prioritized.
The EEM specific principle of sustainable/rational use of resources helps unified
heat supply networks to achieve the most effective use of their limited resources
through technological development and, therefore, less negative impact on the
environment.
Cooperation with environmental stakeholders as one of the EEM specific princi-
ples of innovative development is based on the understanding that economic entities
with their individual targets are operating within their meso- and macro environment
as essential, integrated rather than isolated, elements or as interdependent constitu-
ents of a complex system interrelating with each other and with the system environ-
ment. In this context, compliance of business with the EEM principle of
environmental transparency gives chance to the stakeholders, whose interests should
be taken into account, to gain not only economic, but also social and environmental
benefits of the decisions made by the company management.
Focus on motivational tools stimulating eco-friendly operation and development
demonstrates organizational commitment to further environmentally harmless
220 V. V. Glazkova

economic activities, which should be enshrined by the principle of ecological

motivation and involvement.
Irreversible character of ecological processes and, therefore, of environmental
problems may discourage the integrating of environmental issues into innovative
development of unified heat supply enterprises. The quicker organizations identify
environmental concerns and respond to environmental challenges, the more effective
and efficient they are in preventing the worst possible damage to the environment by
minimizing their negative consequences. Consequently, the EEM of innovative
development should be focused on preventing crisis in ecologically sensitive
areas, and, thus, based on the principle of preventability and timeliness.

Conclusion

With the practice of environmental and economic management gaining momentum

in Russia, more active research and profound studies of its theoretical basics and
methodological foundations are in great demand. In this paper the author describes
the subject area of the EEM, as well as its principles and factors to be considered
when managing innovative development of business. The implementing of the EEM
principles implies that organizations transfer to strategically oriented operational
management and intend to solve environmental problems by integrating or “weav-
ing” eco aspects into production and decision-making. Thus, transformation of
unified heat supply organizations requires building a concept of integrating the
EEM elements into their management system which will result in changing this
system.

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Dynamics of Food Security Factors
in the Regions of the Arctic Zone of the
Russian Federation

Ludmila N. Babkina , Oksana V. Skotarenko ,

and Elena S. Kuznetsova

Introduction

The relevance of the study provided by the need to implement in the regions of the
Arctic zone of the Russian Federation the National projects of the Russian Federa-
tion and their constituent federal projects and one comprehensive plan for the
modernization and expansion of the trunk infrastructure until December 31, 2024.
The main directions or complex events of this plan, directly related to the develop-
ment of the territories of the Arctic zone, are such as Seaports of Russia, the Northern
Sea Route, and transport and logistics centers. Consequently, the need for labor
forces increases, and this, in turn, leads to a change in demand of food products, the
need to meet this demand and study its dynamics. Therefore, the most important
national projects for providing projects with human resources are such as: Demog-
raphy; Health service; Ecology; Housing and urban environment (Passport). How-
ever, none of these national projects, especially the «Demography» and «Health
service» projects, have federal projects for improving the food supply of the popu-
lation, that is, supplying not only of healthy food products, but food in general, and
none have projects for increasing the volume of the food system. Issues related to the
development of strategic priorities and prospects for food security governance in

L. N. Babkina
Saint-Petersburg State University of Civil Aviation named in honor of Air Chief Marshal
A.A. Novikov, St. Petersburg, Russian Federation
O. V. Skotarenko
Murmansk Arctic State University, Murmansk, Russian Federation
Military Educational Institution of Logistics Named After General of the Army A.V.Кhrulyov,
St. Petersburg, Russian Federation
E. S. Kuznetsova (✉)
Murmansk State Technical University, Murmansk, Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 223
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_20
224 L. N. Babkina et al.

Russia are the subject of discussion in many scientific papers. A number of

researchers believe that it is necessary to shift the concept of food security from
external threats and hunger to internal threats that the population faces daily
(Romashkina et al., 2020), others have justified households harvesting as a liveli-
hood strategy embedded in the culture for food security governance in indigenous
communities throughout the Arctic, wherefore, it is proposed to limit state interven-
tion in harvesting (Berman, 2021). Particular attention is paid to the prospects for the
development of animal husbandry in the Arctic zone of the Russian Federation
(Rodnina, 2021). It is obvious that the problem of providing food products to the
population can be solved by forming and implementing several variants of strategic
directions of growth: increasing the import of food products from other regions of
the Russian Federation and from abroad; creating the proper food system; the
creation of a mixed food supply system that includes all three sources of supply—
proper food system, food systems of other regions of the Russian Federation; foreign
food systems. In order to choose a variant of the strategic direction of development,
it became necessary to conduct a comparison study of the rates of change, firstly, of
all factors in each region, and secondly, of each factor in all regions and to determine
the ranks of the regions’ positions.
The goal of this research is to determine the levels of food security in the regions
of the Arctic zone of the Russian Federation and their dynamics based on analysis of
the factors affecting the population’s demand for food products and the capacity of
the consumer market.
Research tasks:
To determine the regions and the period of monitoring;
To itemize the indicators from the annual State statistical reports of the Russian
Federation—the main factors that affect the demand level of the food products;
To determine the rates of change (increments or declining) of the selected indicators;
To conduct a comparison study of the dynamics—rates of change of selected
indicators in the regions of the Arctic zone of the Russian Federation in the
three studied years;
To determine the scope of variation of the rates of change of each indicator;
To realize the grading of the positions of the regions of the Arctic zone of the
Russian Federation according to the rates of change of indicators in the selected
3 years;
To calculate the additive and final ranks of the positions of the regions and identify
the dynamics of changes in the positions of the regions according to these ranks;
To determine the levels of food security in the regions of the Arctic zone of the
Russian Federation in each year and their dynamics;
To create a list of tasks for further research.
Dynamics of Food Security Factors in the Regions of the Arctic Zone of. . . 225

Materials and Methods

The minimum required selection of indicators from the annual State statistical
reporting includes the population, per capita monetary incomes of the population,
customer prices for food products and the proportion (specific weight) of food
purchases to assess the dynamic of change (growth or decline) of a group of
indicators, or, in other words, factors determining the capacity of the food market
in the regions of the Arctic Zone of the Russian Federation.
The research is based on the application of the conceptual issues of the system,
complex and qualimetric methodological approaches, statistical and index methods
of regional qualimetry (Skotarenko & Babkina, 2013), methods of financial and
economic analysis.

Results and Discussion

The rates of change of major economic indicators over the 4 years of observations—
in 2015, 2019, 2020 and 2021, which affect the volume of food consumption by the
population of the regions of the Arctic zone of the Russian Federation, are presented
in Table 1.
The first very significant factor is the population in these territories. Part of this
population is economically active and determines the potential of labor forces, which
are necessary for the implementation of National and Federal projects and a com-
prehensive plan. However, for the last 5 years, the number of economically active
population in the four regions of the Arctic zone differs in the dynamics, and it is
shown in Table 1. Thus, in the Murmansk Region, a depopulation has been observed
throughout the study period. This suggests that the negative growth of the popula-
tion, starting in 2019, is increasing and leads to a similar rate of drawdown of
demand level of food products, all other things being equal, and the eliminated
influence of other factors.
It should be noted that in In Yamalo-Nenets Autonomous Okrug there is a stable
positive dynamics of the growth rate in the period of 2016–2018 years, and which
composes 0.37% relatively to previous periods. In 2019, increase in population was
0.56% compared to 2018. In 2020–2021 years, the indicator value decreased slightly
and amounted to 0.55%. From 2019 to 2021, the population growth in this region
was +0.6%.
The population of the Yamalo-Nenets Autonomous Okrug, for the entire period
from 2015 to 2021, increased from 534,000 people to 547,000 people, that is, by
2.43%.
In the Nenets Autonomous Okrug in 2015–2021, the population remained con-
stant, equal to 44,000 people. Accordingly, the rates of population change remained
equal to non-existent throughout the entire period. Consequently, the dynamic
pattern of this factor in the Nenets region is completely absent and does not affect
the rate of increment or decrease in demand for food products.
 226

Table 1 The rates of increase of the factors determining the capacity of the food market in the regions of the Arctic Zone of the Russian Federation
Rate of increase, %
Population dynamics of the The specific weight of food
regions of the Arctic zone of Per capita monetary income of Consumer price index for food purchases in the structure of
the Russian Federation the population per month products household consumer spending
2019 vs 2020 vs 2021 vs 2019 vs 2020 vs 2021 vs 2019 vs 2020 vs 2021 vs 2019 vs 2020 vs 2021 vs
Region 2018 2019 2020 2015 2019 2020 2015 2019 2020 2015 2019 2020
The Murmansk region -0.80 -0.94 -1,08 13.11 6.43 4.79 -6.52 -2.64 2.13 -9.74 -0.72 1.45
Nenets autonomous 0.00 0.00 0.00 8.88 3.17 3.83 -11.6 3.92 0.68 0.61 -17.0 14.91
area
Yamalo-Nenets 0.56 0.55 0.55 17.41 4.65 8.23 -8.70 0.10 4.36 25.27 -23.0 11.99
autonomous Okrug
Chukotka autono- 0.00 0.00 -2.00 24.49 5.80 7.38 -9.27 1.72 -3.66 23.27 -14.3 -0.24
mous area
L. N. Babkina et al.
Dynamics of Food Security Factors in the Regions of the Arctic Zone of. . . 227

In the Chukotka Autonomous Area, the population remained stable from 2015 to
2020, equal to 50,000 people, and the rate of its changes was equal to non-existent.
However, in 2021, the population decreased to 49,000 people or by 2%,
respectively.
Thus, the scope of variation of the rates of population change in the studied
regions amounted to 1.03% in 2016. In 2018, this value decreased to 0.77%, and in
2019 it increased to 1.36%, then in 2020 to 1.49% and finally in 2021 it increased to
2.55%.
According to the dynamic of changes in the number and demand for food
products, all regions can be included into one of two groups. The first group includes
the Nenets and Yamalo-Nenets Autonomous Okrugs, which are characterized by
stable numbers and the absence of changes in recent years of observations. The
second group includes the Murmansk Region with the downsize dynamics of
population and the Chukotka Autonomous Area with the beginning of population
decrease.
The positions of the regions in 2019 according to the rate of population change
received the following ranks. The first rank belongs to the Yamalo-Nenets Auton-
omous Okrug, the second—to the Nenets Autonomous Okrug and Chukotka Auton-
omous Area, the third—to the Murmansk Region. In 2020, the ranks obtained a year
earlier were preserved. In 2021, the first rank remained to the Yamalo-Nenets
Autonomous Okrug, the second—to the Nenets Autonomous Okrug, the third—to
the Murmansk region, and the fourth—to the Chukotka Autonomous Area.
In 2019, compared with 2015, the largest growth of the second indicator, the
average per capita incomes of people (Table 1), was observed in the Chukotka
Autonomous Area (24.49%), and this exceeds the smallest increase in the Nenets
Autonomous Okrug (8.88%) by 2.76 times, the Murmansk Region (13.11%) by 1.87
times, Yamalo-Nenets Autonomous Okrug (17.41%) by 1.41 times. Let us use the
direct scale of ranking the positions of regions according to the increment value per
capita monetary incomes of people. We would consider that the first rank belongs to
the region with the highest growth rate—the Chukotka Autonomous Area, the
second rank—the Yamalo-Nenets Autonomous Okrug, the third rank—the Mur-
mansk Region and the fourth rank—the Nenets Autonomous Okrug.
In 2020, in relation to 2019, the rates of increase of this indicator decreased
compared to the rates of 2019 to 2015 years in all regions. So, instead of the greatest
value of 24.49% in 2019, such a large increase was 6.43% in the Murmansk region in
2020. We would assign the first rank for this position. The smallest value of the
indicator is 3.17%, and it made up the difference with the largest value by factor of
2.03 and it was on the territory of the Nenets Autonomous Okrug, to which we will
assign the fourth rank. Consequently, the scope of variation in rates of increase has
slightly decreased. The second rank with a rate of increase of 5.8%, and it is differ
from the highest value by factor of 1.11.We will assign it to the Chukotka Auton-
omous Area. The third rank belongs to the Yamalo-Nenets Autonomous Okrug with
a rate of increase of 4.65%, which is 1.38 times less than in the Murmansk Region.
In relation to 2020, in 2021 the rate of increase of per capita monetary incomes of
the population slightly increased in all autonomous okrugs, compared to the
228 L. N. Babkina et al.

previous year, and only in the Murmansk region decreased. The highest rate of
increase was 8.23% in the Yamalo-Nenets Autonomous Okrug, which exceeds the
previous value of the highest rates by 1.28 times. Therefore, the first rank belongs to
this region. The fourth rank has an indicator value equal to 3.83% and it is 2.15 times
less than the largest value of the Yamalo-Nenets Autonomous Okrug. This rank will
be assigned to the Nenets Autonomous Okrug. Consequently, the range of variation
of the value of the indicator slightly increased from 2.03 times to 2.15 times. We will
assign the second rank to the Chukotka Autonomous Area (7.38%), the third rank to
the Murmansk Region (4.79%), which is 1.12 times and 1.72 times less than the
indicator in the Yamalo–Nenets Autonomous Okrug. Thus, it can be concluded that
there is no tendency of increasing or decreasing of the growth rate of per capita
monetary incomes of the population in the autonomous okrugs and only in the
Murmansk region, there is a tendency of decreasing of the rates of increase of per
capita incomes of the population.
The third indicator, which affects the capacity of the consumer food market, is the
consumer price indices for food products presented in Table 1.
From the data of the State statistical reporting according to this indicator, it is
possible to calculate the rates of positive or negative incremental prices for food
products. Thus, in 2019, there was a decrease in the growth rate of the price index in
relation to 2015 in all regions of the Arctic zone. The most noticeable negative
increment was observed in the Nenets Autonomous Okrug (-11.55%), the smallest
negative increment was in the Murmansk Region (-6.52%) which was 1.77 times
less. With the help of the inverse ranking scale, we will assign the first and fourth
ranks to these regions, respectively. The second and third ranks were given to
the Chukotka Autonomous Area and Yamalo-Nenets Autonomous Okrug with the
indicator values equal to -9.27% and -8.70%. These regions were behind the
schedule of the leading region, the Nenets Autonomous Okrug, by 1.25 times and
1.33 times, respectively. The scope of variation in the growth of price indices was
5.03%.
In 2020, in relation to 2019, the regions were divided into three groups. The first
group included the Murmansk region, in which the decline in consumer price indices
was continued (-2.64%), the second group included the Yamalo-Nenets Autono-
mous Okrug, in which prices stagnated with an increase of 0.1%. The third group
included the Chukotka Autonomous Area and Nenets Autonomous Okrug with an
increase in the value of the indicator by 1.72% and 3.92%, respectively. Thus,
the ranks of the regions’ positions were distributed as follows: the first rank to the
Murmansk Region, the second rank to the Yamalo-Nenets Autonomous Okrug, the
third and the fourth ranks to the Chukotka Autonomous Area and Nenets Autono-
mous Okrug, respectively. The scope of variation of changes in the indicator slightly
increased compared to the previous year and became equal to 6.54%.
In 2021, there were also three groups of regions, but their composition has
changed. The first group consisted of the Chukotka Autonomous Area with a
downward change in the price index by 3.66%, the second group included the
Nenets Autonomous Okrug, where was a stagnation of price indices with a slight
increase of 0.68%. The third group included the Murmansk Region and the Yamalo-
Dynamics of Food Security Factors in the Regions of the Arctic Zone of. . . 229

Nenets Autonomous Okrug with a corresponding increase in the price index by

2.13% and 4.36%. The distribution of the ranks of positions can be represented as a
sequence. The first rank—the Chukotka Autonomous Okrug, the second rank—
Nenets Autonomous Okrug, the third and the fourth—the Murmansk Region and
Yamalo-Nenets Autonomous Okrug, respectively. The scope of variation of the
studied indicator increased even more during the study period and amounted to
8.02%. In that way, firstly, it has not been identified rising tendency, decrease
tendency or stagnation of the consumer price index for food products in any region;
secondly, there was an even greater differentiation of regions according to this
indicator, as judged by the found scope of variation.
The fourth indicator is the rate of change in the proportion of (specific weight)
food purchases in the structure of household consumer spending (Table 1).
Thus, in 2019, compared to 2015, in the Yamalo-Nenets Autonomous Okrug and
Chukotka Autonomous Area, there was an increase in the share of household
expenses on food purchases by 25.27% and 23.27%, respectively. In the Nenets
Autonomous Okrug there was a slight increase by less than 1% (0.61%) and only in
the Murmansk Region there is a decrease in the share of food purchase expenses by
9.74%. The scope of variation of this indicator was an enormity of 35.01%. We will
assign the corresponding ranks to the positions of the regions on the assumption that
the rates of increase of the share of household expenses on food purchases have a
positive effect on the increasing of the capacity of food market. The first rank to the
Yamalo-Nenets Autonomous Okrug, the second rank to the Chukotka Autonomous
Area, the third rank to the Nenets Autonomous Okrug and the fourth rank to the
Murmansk Region.
In relation to 2019, in 2020 the rates of increase changed to negative and showed
a decrease of share of food expenses in all regions of the Arctic zone of the Russian
Federation. The largest decrease by 23.05% occurred in the Yamalo-Nenets Auton-
omous Okrug, and the smallest by 0.72% was in the Murmansk Region. In the
Chukotka Autonomous Area and Nenets Autonomous Okrug, such a decrease in
rates was 14.32% and 16.92%, respectively. The scope of variation of the rates of
drawdown of the share of expenses amounted to 22.33%. We would use the reverse
ranking scale and assign the first rank to the region with the lowest rate of drawdown
in the share of household expenses on food purchases—to the Murmansk region, the
second rank to the Chukotka Autonomous Area, the third rank to the Nenets
Autonomous Okrug and the fourth rank to the Yamalo-Nenets Autonomous Okrug.
In 2021, compared to 2020, there was an increase in the rate of growth in the share
of expenses by 14.91% and 11.99%, respectively in two regions—in the Nenets and
Yamalo-Nenets Autonomous Okrugs. We will assign the first and the second ranks
to these regions according to a direct ranking scale. The Murmansk Region has third
rank with a slight increase of 1.45% and the Chukotka Autonomous Okrug has the
fourth rank, on the territory of which there was a decrease of the share of expenses by
0.24%, and it can be considered as a stagnation of the process. The scope of variation
can be determined by a value equal to 15.15%. Consequently, the scope of variation
of the rates of change in the share of household expenses on food purchases
decreases in length of time, which can be assessed as a convergence of the positions
of the regions.
230 L. N. Babkina et al.

The Murmansk region

150.0 112.5 113.1 106.4 104.8

100.0
50.0 30.8 27.8 27.6 28.0

0.0
2016 2019 2020 2021

Indices of per capita monetary incomes of the population, %

Consumer price index for food products, %
Food purchases in the structure of household consumer spending, %

Fig. 1 Indices of per capita monetary incomes of the population, customer prices for food products
and the specific weight of food purchases in the spending pattern of household, percentage in the
Murmansk region

Nenets Autonomous Area

150.0 107.7 108.9 103.2 103.8

100.0
32.9 33.1 27.5 31.6
50.0
0.0
2016 2019 2020 2021

Indices of per capita monetary incomes of the population, %

Consumer price index for food products, %

Food purchases in the structure of household consumer spending, %

Fig. 2 Indices of per capita monetary incomes of the population, customer prices for food products
and the specific weight of food purchases in the spending pattern of household, percentage in the
Nenets Autonomous Area

The dynamic of changes for each region can be represented on the Figs. 1, 2, 3,
and 4 according to the second, third and fourth studied indicators: incomes of people
per capita, customer prices on food products and the share (specific weight) of food
purchases in the structure of households.
Thus, it follows from Fig. 1 that in the Murmansk region in 2019, the best
position has rank 3, it belonged to the growth rate of incomes of people per capita,
and the region has the last position and the fourth rank according to the rates of
change of two indicators: the consumer price index for food products and the share
of food purchases in the structure of household consumer expenses.
In 2019, the additive rank for this region for four indicators was equal to 11 and
determined the worst state of the region in terms of the possibility of increasing the
volume of the food market. In 2020, the region’s position improved greatly in all
three indicators to the first rank and allowed it to establish itself as a leader with an
Dynamics of Food Security Factors in the Regions of the Arctic Zone of. . . 231

Yamalo-Nenets Autonomous Okrug

200.0 117.4
109.0 104.6 108.2
100.0 27.7 34.7 26.7 29.9
0.0
2016 2019 2020 2021

Indices of per capita monetary incomes of the population, %

Consumer price index for food products, %
Food purchases in the structure of household consumer spending, %

Fig. 3 Indices of per capita monetary incomes of the population, customer prices for food products
and the specific weight of food purchases in the spending pattern of household, percentage in the
Yamalo-Nenets Autonomous Okrug

Chukotka Autonomous Area

200.0 124.5
105.6 105.8 107.4
100.0 39.1 48.2 41.3 41.2
0.0
2016 2019 2020 2021

Indices of per capita monetary incomes of the population, %

Consumer price index for food products, %
Food purchases in the structure of household consumer spending, %

Fig. 4 Indices of per capita monetary incomes of the population, customer prices for food products
and the specific weight of food purchases in the spending pattern of household, percentage in then
Chukotka Autonomous Area

additive rank equal to 3. However, in 2021, this additive rank decreased to 9, because
the region began to have a rank equal to 3 according to all indicators. Thus, we can
say about unstable position of the region in comparison with others, which in 2019
was the worst, in 2020—the best, and in 2021 again plummet to the lowest.
According to Fig. 2, in 2019 the Nenets Autonomous Okrug, had the best position
in terms of the rates of change in the customer price index for food products, and the
worst position in terms of the growth rate of incomes of people per capita. In terms of
the share of food purchases, this region had the third rank.
In 2019, the additive rank was estimated at 8 units. In 2020, the position of this
region according to the best estimator deteriorated to the fourth rank, and according
to the rest of the compared estimators, it stayed at the same positions, so the additive
rank also changed by 3 units for the worse and amounted to 11 units. In 2021,
according to the first indicator, the growth rate of incomes of people per capita, the
position has not changed and stays the same with a rank equal to 4 units. However,
the situation improved for each of the two indicators by 2 units and the additive rank
232 L. N. Babkina et al.

changed by 4 units, respectively, and became equal to 7 units. According to the

Nenets Autonomous Okrug, it can also be concluded that its general position on the
dynamics of indicators, which affect the capacity of the consumer food market is
unstable.
The Yamalo-Nenets Autonomous Okrug differs from other regions according to
the dynamic of changes in the studied indicators; the position was not maintained for
any of the three indicators in the 3 years under study (Fig. 3).
Thus, according to the rates of change of the incomes of people per capita, the
position went down, and then improved. The opposite dynamics occurred according
to the rates of change in the customer price index for food products, when it was
noted the deterioration of the position after it’s improvement. The greatest wavering
in the ranks, first for the worse (from rank 1 to rank 4), and then for the better (to rank
2), is noted according the rates of change in the share of customer expenses on food
purchases.
According to the additive rank, the Yamalo-Nenets Autonomous Okrug took the
second place in 2019 (rank 6), the third place in 2020 (rank 9) and in 2021 again
came out on top and received an additive rank equal to 7 units in addition to the
positions of the Nenets Autonomous Okrug and Chukotka Autonomous Area.
In 2019 the Chukotka Autonomous Area, according to Fig. 4 and the additive
rank, had the best position (rank 5), but then, in 2020 the position dropped to second
place (rank 6), but in 2021, with an increase in rank to 7 units, it rose to the first
place.
The Chukotka Autonomous Area occupied the most stable position in terms of
the rates of change of incomes of people per capita, which received the first rank in
the first year of observations, and then the second rank in the next 2 years. According
to the third indicator, there is an opposite tendency, when after the stagnation in the
first 2 years, estimated as a rank 2, there is a deterioration of the position to the last
place among the regions, according to the fourth rank. According to the second
indicator (the rates of change in the consumer price index) there is no stagnation,
because the deterioration of the position to the third rank in 2020 compared to 2019
(rank 2) turns into an improvement to the first rank in 2021.
It can be concluded that in 2021, the Murmansk Region occupied the worst
position in relation to other studied regions according to the positive increment of
factors, which affect the food consumption of population. All autonomous areas—
Nenets Autonomous Okrug, Yamalo-Nenets Autonomous Okrug and Chukotka
Autonomous Area were in an equal, comparable position, which was assessed by
an additive rank equal to seven.
The final ranks, taking into account the position of the regions, according to the
rate of population change, can be presented in the following sequence. The Mur-
mansk region received such ranks: in 2019–14 (3 + 11), in 2020–6 (3 + 3), in
2021–12 (3 + 9), respectively.
In 2019, 2020 and 2021 the Nenets Autonomous Okrug received the
corresponding ranks equal to 10 (2 + 8), 13 (2 + 11) and 9 (2 + 7).
Yamalo-Nenets Autonomous Okrug was distinguished by such final ranks: in
2019–7 (1 + 6), in 2020–10 (1 + 9), in 2021–8 (1 + 7).
Dynamics of Food Security Factors in the Regions of the Arctic Zone of. . . 233

In 2019 the Chukotka Autonomous Area had a rank of 7 (2 + 5), in 2020–9

(2 + 7), in 2021–11 (4 + 7).
Consequently, the dynamic of the population does not affect the final positions of
the three regions—the Murmansk Region, the Nenets and Yamalo-Nenets Autono-
mous Okrugs according to the rates of change. The population dynamic affects the
rank of the position only in the Chukotka Autonomous Area in 2021, which was
worsened. Thus, the additive rank of the positions of the regions of the Arctic zone of
the Russian Federation shows a high level of food security in 2019 in the Yamal-
Nenets and Chukotka Autonomous Okrugs, an average level in the Nenets Auton-
omous Okrug and a low level in the Murmansk Region. In 2020 this indicator
reached high level in the Murmansk region, in the Yamalo-Nenets and Chukotka
Autonomous Okrugs it decreased to the average level, and in the Nenets Autono-
mous District became low. In 2021 a high level of food security was observed in the
Yamalo-Nenets Autonomous Okrug, in the Nenets and Chukotka Autonomous
Regions it was average, and again the Murmansk Region differed from the auton-
omous regions with low level of food security. In three regions (Murmansk region,
the Nenets and Yamalo-Nenets Autonomous Okrugs), there was no steady upward
or downward trend in food security. Only in Chukotka Autonomous Okrug during
the observed period, a stable trend towards a decrease in the level of food security
from high to medium was revealed.
It should be noted that in this study we understand sustainable development not as
a balanced development of three factors—economic, environmental and social, but
as a stable trend towards changing factors, including the level of food security.
The level of food security of the Arctic zone territories is characterized by
significant unevenness. This situation is a result of different production and eco-
nomic development of the territories as well as differences in their cultural, historical
and climatic factors. Socio-economic conditions of the Arctic zone regions are not
investigated widely. Meanwhile, average annual temperatures and precipitation,
type of relief, proximity to the sea and ocean areas have a significant impact not
only on the possibility of food production for the population, but also on the volume
of food consumption and their diversity. Another problem is delivery of goods
produced in the non-Arctic zone, as well as their cost.
A typical result of these challenges is low level of economic development of the
Arctic zone. At the same time, changing trends of socio-economic, environmental
and technological development leads to the need for more active development of the
Arctic territories. Meanwhile, it is necessary to follow all restrictions established by
environmental legislation, as well as to take into consideration the interests of the
indigenous population and the actual and potential capacity of the food market. If we
comply with all these requirements, the economic development of the Arctic terri-
tories can be sustainable and efficient. Therefore, the important task of our research
is to identify and analyze the factors of food security in the regions of the Arctic zone
of the Russian Federation and determine scenarios for its increase. The strategy for
the development of the Arctic zone of the Russian Federation and ensuring its food
security as a part of national security strategy for the period up to 2030 should
include the current level of food security analyzed with indicators that take into
account the influence of various factors.
234 L. N. Babkina et al.

Conclusion

The conducted research has shown that:

1. The development of factors affecting the capacity of food market in the regions of
the Arctic zone of the Russian Federation is uneven and doesn’t show any certain
tendencies in increasing or decreasing the rate of the main indicators;
2. The current national and federal projects completed by December 31, 2024 may
contribute to: the start of positive dynamics; the increasing level of labor
resources attracted for implementation of the “Plan for the modernization and
expansion of the main infrastructure for the development of seaports of the North-
ern Sea Route”; creation of transport and logistics centers in these territories;
3. The level of food security of the regions ensuring their sustainable development
depends on the level of consumption and production of food.
Further research is necessary in the following directions:
The trends of the production rates for the main elements of the food system
(agriculture, crop production and animal husbandry) in the regions of the
Arctic zone;
Determination of food production per capita in the main sectors of the food system in
the regions of the Arctic zone of the Russian Federation;
Evaluation of the basic food production and consumption forecasts in the regions of
the Arctic zone of the Russian Federation.

Acknowledgements The research was performed as part of a proactive R&D initiative (state
registration number in Integrated National Information System R&D 122060900086-8).

References

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living conditions in the Arctic. Sustainability, 13(13), 7071. https://doi.org/10.3390/
su13137071
Rodnina, N. V. (2021, March). Agro-industrial complex of the Arctic of Yakutia: Features of
development and prospects. In IOP conference series: Earth and environmental science (Vol.
666, No. 6, 062065). IOP Publishing. doi:https://doi.org/10.1088/1755-1315/666/6/062065.
Romashkina, G. F., Davydenko, V. A., & Khuziakhmetov, R. R. (2020, September). Problems of
food security in the Russian Arctic. In IOP conference series: Materials science and engineer-
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Economic Sciences, 5(180), 161–165.
ESG Rankings to Confirm the Commitment
of Universities to the SDGs

Svetlana A. Zhutiaeva , Alexander Yu. Usanov ,

and Aleksandra V. Selezneva

Introduction

In 2015, the countries of the world unanimously adopted the document

«Transforming our world: the 2030 Agenda for Sustainable Development». The
17 Sustainable Development Goals (SDGs) and their 169 targets are at the center of
the 2030 Agenda. The SDGs are a set of global priorities to address today’s most
pressing climate change, poverty, inequality, health and conflict (ESG) challenges.
The SDGs have aroused interest and response in most countries and individual
areas of activity, many new initiatives and partnerships have appeared, all this proves
the need and viability in the implementation of these goals. The United Nations has
called on universities to be catalysts for the coming changes, as none of the SDGs
can be achieved without the contribution of higher education through research,
learning and community participation. Universities play a key role in the implemen-
tation of the SDGs given their enormous learning and teaching capacity (Bien &
Klußmann, 2021).
Universities are drivers of technological and social progress through scientific-
research activities, scientific discoveries and the creation of new knowledge. They

S. A. Zhutiaeva (✉)
Emperor Alexander I St. Petersburg State Transport University, St. Petersburg, Russian
Federation
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
A. Yu. Usanov
Financial University under the Government of the Russian Federation, Moscow, Russian
Federation
A. V. Selezneva
Saint-Petersburg State University of Economics, St. Petersburg, Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 235
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_21
236 S. A. Zhutiaeva et al.

attract and develop talents and stimulate creativity; Universities occupy a central
position in regional and national innovation systems. University services are critical
to help the global community understand the challenges, opportunities and intercon-
nectedness of the SDGs in the process of designing and implementation new
solutions, designing and evaluating new policies and trajectories of changes, and
monitoring of progress.
Universities occupy the position of neutral and respected parties in society.
Therefore, they have the opportunity to take a leading role in the process of shaping
the attitude of regional, national and international communities towards the 2030
Agenda through intersectoral dialogue and cooperation.

Methodology and Theory

To measure and confirm the commitment of universities to the SDGs, there are
various rankings. The ESG rating is an expert assessment that characterizes an
organization’s focus on sustainable development in the environmental (E), social
(S) and corporate (G) areas. On the one hand, the ESG rating allows you to evaluate
the effectiveness of company management. On the other hand, the ESG rating allows
to predict possible risks based on these key blocks. The ESG rating represents the
opinion of analytical agencies on the extent to which the process of making key
business decisions in the company is focused on sustainable development in the
environmental, social and economic spheres, as well as an analysis of practical steps
in this direction (Ahmad et al., 2021; Drempetic et al., 2020).
ESG ratings vary markedly by rating agency, as each has a unique rating
methodology for a particular company (Burritt & Schaltegger, 2010; Bice & Coates,
2016; Xu et al., 2020).
KPMG estimates that there are 160 ESG ratings providers and information
product providers worldwide. This includes both for-profit and non-profit companies
to assess how corporate commitments, performance, business models and structures
are in line with sustainable development goals (Jonsdottir et al., 2021).
Despite this number of agencies, most companies and investment firms deal with
the top five: ISS ESG, ISS ESG, a department of Institutional Shareholder Services,
consulting firm; Moody’s, a respected ratings company; MSCI, which publishes
hundreds of global investment market indices; S&P Global, a financial analytics
company which is best known for its stock indexes; and Sustainalytics, a division of
Morningstar that provides a wide range of investment research services. Among
other noteworthy assessments we include Bloomberg ESG disclosure assessments,
Fitch climate temperature vulnerability assessments, FTSE Russell ESG assess-
ments, and climate assessments (De la Poza et al., 2021).
The Russian market has also joined the ESG and sustainable finance initiatives by
issuing the first green bonds, as well as creating a Sustainability section on the
Moscow Exchange. The first ESG ratings assigned to Russian companies and banks
appeared (National Rating Agency LLC, Expert RA, AK&M).
ESG Rankings to Confirm the Commitment of Universities to the SDGs 237

In order to systematize information and understand the purpose of the results of

these ESG ratings, we suggest using the following classification of rating types:
Universal type (General-purpose type). This category includes rating agencies
that collect and aggregate publicly available data and disseminate this data system-
atically to end users. Agencies do not have a rating methodology and do not provide
overall ESG scores. Data users should determine the materiality of the data and
develop their own methodology when building a portfolio. The main providers of
such data, for example, are Refinitiv and Bloomberg.
Regional type. These rating agencies use hundreds of different environmental,
social and governance metrics and apply a well-established systematic methodology
to determine a company’s overall ESG score, usually in a specific country. They also
issue country and industry trend reports. The Sustainable Investment Research
Institute (SIRIS) provides comprehensive data on the ESG ratings of companies in
the Asia-Pacific region. BIK Ratings is a rating agency in the Republic of Belarus.
The methodology for assigning ESG ratings developed by this agency can be applied
both to a single organization, and to cities and regions.
Specialized type. This category includes rating agencies that specialize in specific
ESG issues such as environmental/carbon performance, corporate governance,
human rights or gender diversity. Examples of such providers are TruCost (currently
owned by S&P Global), the nonprofit Carbon Disclosure Project (CDP), and
Equileap (gender equality data). QS Sustainability World University Rankings,
dedicated to indicators of social and environmental sustainability in higher
education.
Ratings are a convenient way to bring together a lot of complex data into a single
system of measurements, including the weighting of seemingly contradictory char-
acteristics. Each rating organization has its own process and methodology for
creating ratings, in general, this process includes three main areas of activity:
– Data collection: collecting of information about the company from various
sources.
– Materiality: determining which metrics are relevant for a given company and
sector.
– Estimating: weighting and scoring data to create a ranking.
The most commonly used sources of ESG information are: Annual Report, Sustain-
ability Report; investor presentations, profit and loss reports; external data (publica-
tions about the company, information from government bodies, the media); press
releases; analytical reports on research, the history of the organization’s relationship
with contractors (de Villiers et al., 2021).
The data used in the rankings is complex and covers hundreds of parameters,
some of which are subjective. When companies do not provide the requested
information, rating agencies often “guess” it, that is, fill in the gaps with data
based on assumptions obtained from complex models they have built.
In the ranking process, agencies use a special mechanism to adjust the company’s
score depending on its industry. ESG ratings are created using both quantitative
models and qualitative analysis and are accompanied by analyst reports explaining
238 S. A. Zhutiaeva et al.

the ratings. Based on this, ratings may include an element of subjective judgment or
opinion. The use of different methods and approaches leads to the fact that the same
company will have a fairly high rating from one agency and a rather low rating from
another.
All this breeds user distrust in the functioning of the ratings market, and raises
concerns about potential problems:
1. The lack of transparency in methodologies. Methodologies may differ in
the amount of data, indicators or key performance indicators used to measure
the problem (which can be in the hundreds or in some cases thousands) and, in the
case of assessments and ratings, in the applied weightings between different
groups (environmental, social and governance). At the same time, the methodol-
ogies are, as a rule, reviewed annually. Ratings may differ in their finality, focus
on performance or risks, or take different approaches to materiality.
2. Lack of transparency in data sources. Rating agencies note the lack of ESG
information in certain regions as a particular problem that can negatively affect
the quality and coverage of data. One provider cited relatively lower ESG
disclosures in emerging markets and Asia-Pacific region as an example of this
issue. Rating agencies may request or receive ESG information from the organi-
zations to which these ratings are assigned on a bilateral basis, and in this case,
minimize the impact of a number of the above problems. However, where this
occurs, there may be transparency, auditability and level playing field risks for
both the rating agency and the organizations subject to these ratings (Elmassah
et al., 2022).
3. Conflict of interests. Some rating agencies also provide advisory services to
companies on ESG corporate strategy. In some cases, this may include, for
example, an understanding of how ESG ratings are developed, or assistance
with reporting that affects ESG ratings and information sources (for example,
the review of responses to supplier questionnaires, recommendations for improv-
ing the quality of reporting). Some agencies offer regulatory reporting assistance
to help companies and financial market participants comply with sustainability
rules. This can lead to a conflict of interest where the consulting firm may provide
information that would allow named company to gain an advantage in terms of
obtaining a good ESG rating.
4. Unfair business practices. Assessors may not adhere to their methodologies,
policies and procedures, apply ESG factors consistently, disclose appropriate
information about the use of ESG factors applied in rating actions, or maintain
effective internal control related to the use of ESG concerned with data from
affiliates or non-affiliates in ratings third parties.
5. Companies tend to rank against their peers, not against all the world global
companies. So, a high-performing oil and gas company could be just that: a fossil
fuel, refining, transportation, and retail company that leads its sector in terms of
environmental, social and governance risks.
The availability and level of detail of ESG methodologies is still evolving, users of
these data continue to express concerns about the consistency and reliability of such
ESG Rankings to Confirm the Commitment of Universities to the SDGs 239

data, and industry specifics, which have a different impact on the bottom line, must
be taken into account.
Such lack of methods coordination is largely due to absence of a single legally
fixed basis for assigning an ESG rating, the development of which should become a
priority for the Government in the near future (Wong & Zhang, 2022).
The higher education sector uses QS World University Rankings. This index is
based only on environmental and social issues, with each of the two main categories
receiving a 50% weighted score (Engelhardt et al., 2021). Environmental impacts
reflect the external impact a university has when it comes to building a sustainable
institution, participating in relevant and effective research, and incorporating sus-
tainability into the curriculum. Social factors reflect how seriously universities take
their role in creating a more fair and equitable society.
Table 1 provides recommendations for evaluating the activities of universities in
assigning the ESG rating. When choosing samples and benchmarks used in
assessing compliance with standards and with the best practices in the field of
sustainable development, we were guided by the following documents: Sustainable
Development Goals, SDGs, Federal Laws, Presidential Executive Orders, Strategic
Leadership Program “Priority 2030” and the results of expert analysis.
Thus, the developed indicators and criteria for evaluating the activities of univer-
sities in assigning an ESG rating provide for the integration into their activities of the
principles of sustainable development and assessment of the results of achieving
goals.

Discussion

The lack of standardization of ESG disclosures affects the quality and availability of
information that rating agencies can use. There is an urgent necessity to improve
the consistency, comparability and reliability of sustainability reporting. In terms of
the directions of the regulator and the regulatory framework, we can recommend the
formation of industrial ESG standards, the development of a regulatory framework
for priority aspects of the ESG agenda, the formation of tools to ensure regular public
dialogue between business representatives, non-profit organizations, the media,
institutions in the field of science and education.
To level out the potential problems associated with improving the transparency,
clarity and fairness of the ranking results, more use should be made of data provided
not by universities, but by reputation data, alumni lists and national statistics.
Standardization in the disclosure of information on ESG factors will allow the
usage of artificial intelligence and machine learning to improve the processes of
collecting unstructured data, conducting research and indexing. These technologies
will improve the timeliness and accuracy of data collection, analysis, and validation
to deliver dynamic content.
240 S. A. Zhutiaeva et al.

Table 1 Groups of indicators and criteria for evaluating the activities of universities in assigning an
ESG rating (Han et al., 2016; KPMG, 2020; Minutolo et al., 2019)
Е1. Environmental management
Е1.1. The quality of university’s environmental management
The university has a valid ISO 14001 certificate.
Е1.2. Environmental policy
The university has developed, approved and published on the site an environmental policy.
Е1.3. Environmental requirements for contractors and suppliers
Environmental requirements for suppliers are developed and published on the website.
Е2. Lean use of resources
Е2.1. Water consumption and energy intensity
Specific consumption is the amount of water or energy consumption per student over the past
three years showing a downward trend.
Е3. Environmental impact
Е3.1. Household Waste Collection Program
A program for the separate collection of household waste for recycling (paper, glass, plastic, etc.)
and a program for the replacement and disposal of mercury lamps, batteries and appliances have
been developed and published on the website.
Information about this is available on the university campus.
Е3.2. Waste minimization program
Waste minimization program developed and published on the website. Information about this is
available on the university campus.
Е4. Infrastructure
(University campus = green campus = smart campus)
Е4.1. Comfortable and safe spatial environment
The volume of green spaces to the total area is not less than 60%. We allocate at least 30% of
financial resources for the construction of educational and residential facilities. Transport
accessibility to educational and residential buildings, training grounds is 100%.
Е5. Educational and research activities related to sustainable development
Е5.1. Educational environmental programs
Every year, each department holds at least two events, with a minimum of 50 participants. The
university has student societies focused on environmental sustainability.
Е5.2. Research funding in the field of sustainability development
20% of all budgetary funds allocated for scientific projects are directed to the research of
environmental programs. Extrabudgetary funding is 20% of state funding.
Е5.3. Research and development work on environmental and environmental activities
The university has determined the composition of the main social and environmental projects
related to climate change. They are constantly being researched. Each department conducts at
least one study each year.
Е6. Social activity on the environmental agenda
Е6.1. Activities to promote responsible consumption
An item by the university (or its branches) in the media on the environmental agenda at least once
a month.
S1. Society
S1.1 Social investments and development of regions of presence
The university and all its branches participate in regional events at least once a month.
(continued)
ESG Rankings to Confirm the Commitment of Universities to the SDGs 241

Table 1 (continued)
S1.2 Charity and volunteering
The university has developed, approved and published on the website comprehensive programs of
charity and volunteering.
S2. Human capital
S2.1 The average salary of teachers at the university is 200 percent of the average salary in
the respective region. For other categories of employees, the wage fund has been growing for
three years. A decile differentiation factor is performed.
The decile differentiation factor is the ratio of the minimum wage of the highest paid 10% of
workers to the maximum wage of the lowest paid 10% of workers.
S2.2 The average monthly income of students is 35% or more
The ratio of the average monthly income of students and PG students to the average salary in the
economy of the region (only university payments are taken into account)
S2.3 Availability of personnel development and employee training programs
The university has a relevant department that has developed and published on the website
training or advanced training programs for employees, and training subsidy programs.
Employees participate at least one program per year.
S2.4 The employee turnover rate is lower than the industry average.
S2.5 Availability of a voluntary medical insurance program (VHI) and other forms of
medical care for employees and students.
S2.6 Availability of a financial support program, including in the field of housing for
employees and students.
S3. Human rights
S3.1 Availability of a feedback mechanism and resolution of ethical issues for employees,
students, contractors of the university
The university has channels, including online, to solve problems in the field of human rights
violations, corruption, labor violation, corporate ethics, conflict of interests. At the end of the
year, unresolved disputes accounted for 10% of all applications.
S3.2 Inclusivity
The university has an employment and training program for workers with limited health capac-
ities to reduce discrimination
S3.3 Gender balance: proportion of women in leadership positions.
Women in leadership positions are more than 30%
S3.4 Age balance: proportion of young workers
The proportion of employees under the age of 39 in the total number of teaching staff is 40% and
above.
S4. Students
S4.1 Quality and safety of educational services
The presence of internal documents regulating the quality standards of educational services, the
presence of a unit responsible for the implementation and maintenance of quality standards for
educational services in all divisions (for all faculties and branches).
S4.2 Student self-governance
The resource center for the coordination and development of youth policy has been established
and is functioning. At least 3 youth non-profit organizations work at the university; at least
30 youth training projects are created annually.
(continued)
242 S. A. Zhutiaeva et al.

Table 1 (continued)
S4.4 Employability and graduate opportunities
The employment and promotion Center of the University calculates an integral indicator of
employment outcomes = 1 * percentage of employed graduates + 1.5 * percentage of employed in
the specialty + 2 * percentage of graduates with wages above the average for the region.
The maximum score is 450.

Conclusion

The ESG line is relatively new and continues to evolve nowadays, and there is still
inconsistency in many aspects of assessing a company’s ESG profile and related
risks. Ratings for the same company can vary significantly depending on the rating
agency. Evaluation systems in the field of sustainable development (metrics, indices,
ratings) should be developed, ESG objectives and indicators should be integrated
into the activities of companies, as well as into the work of universities, since they
occupy a unique position in society—they create and disseminate knowledge, none
of the SDGs can be achieved without universities.

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Concept of Taking Risk-Tolerant Financial
Decisions Under Elevated Uncertainty

Vladimir A. Kunin and Stanislav I. Peshko

Introduction

When the company’s management takes financial decisions under the conditions of
economic turbulence described by increased volatility of market conditions, it faces
a large number of alternatives which renders the analysis difficult and, as a conse-
quence, may result in high-risk decisions under the conditions of time limitation.
High-risk financial decisions taken under the conditions of economic turbulence and
uncertainty create potential issues related to a sharp increase in the company’s
private financial risks, including the risks of insolvency, loss of financial stability
and bankruptcy. The growth of such risks in the conditions of economic turbulence
is unacceptable for most companies. Thus, the study relevance is determined by the
need to formalise the framework of taking complex financial decisions under the
conditions of economic turbulence and, as a consequence, elevated uncertainty, that
ensure the required limitation of private financial risks.
As it is commonly known, the company’s financial decisions are aimed at
deriving profit in the short and long term (Andreou et al., 2014; Nguyen et al.,
2020; Kochhar, 1997). That said, good financial performance has a positive impact
on the company value (Bhullar, 2017; Sudiyatno et al., 2012; Aryantinia & Jumono,
2021; Santoso, 2019; Mursalim et al., 2015) the increase of which is a key task of
business management. It should be noted that the company’s management takes its
financial decisions based on market information (Mathews, 2005), which is obtained
and processed in the present-day financial practice under the uncertainty.
Under the uncertainty typical for the present, there is a large confidence interval
for evaluating indicators or parameters of the company’s operations that have a

V. A. Kunin · S. I. Peshko (✉)

Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 245
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_22
246 V. A. Kunin and S. I. Peshko

direct impact on the evaluation of possible losses caused by the occurrence of

various and, in particular, financial risks (Kunin & Peshko, 2022) and the financial
decision-making process.
Elevated uncertainty encourages the management to postpone the decision mak-
ing in anticipation of more accurate and full information which causes a decrease in
the company’s sensitivity to changes in external factors (Aastveit et al., 2017).
According to the study Bijsterbosch and Guérin (2013), elevated uncertainty is
closely related to a consistent and significant decline in economic activity, lower
inflation, higher unemployment, and lower bond yields and share prices.
In the field of finance, the most important decisions include financial and invest-
ment ones. S.A. Belozerov distinguishes two core groups of financial decisions,
i.e. decisions on formation of the following: (1) structure and amount of sources of
income; (2) structure of deferred expenses. V.I. Solovyov offers a wider range of
types of financial decisions that includes: (1) decisions on the distribution of funds
for consumption and savings; (2) investment decisions; (3) debt financing decisions;
(4) risk management decisions. At the same time, some researchers (e.g. Ross, 1973)
classify decisions on working capital determination as financial management deci-
sions as well.
The study (Nguyen et al., 2022) shows that investment decisions have no effect
on share capital risk, working capital decisions have a positive effect on share capital
risk, while financial decisions have a negative effect on share capital risk. From our
point of view, investment decisions are a separate class of decisions that is divided
into subclasses of decisions on real and financial investment. In this article, we will
focus on key financial decisions in the field of capital structure management and
dividend policy shaping.
Determining the capital structure is one of the most important decisions in the
company’s operations, as it enables to find a balance among various sources of
financing (Gul & Cho, 2019) and their cost which is determined by the trade-off
theory of capital structure (Myers, 1984). The studies (Graham, 2000; Minton &
Wruck, 2001; Frank & Goyal, 2003) arrived at results suggesting that companies are
more likely to use a conservative debt financing strategy and prefer equity financing.
Reinvestment of profits earned in investment projects can become decisive under the
uncertainty, which is shown in the study (Cuevas-Vargas et al., 2022).
Under the conditions of economic turbulence and, as a consequence, elevated
uncertainty, an important aspect of taking financial decisions is their ability to
confront a particular financial risk, i.e. risk tolerance. In the paper (Zubova, 2015),
the risk tolerance of an economic entity is defined as tolerance to the impact of
external risks, i.e. low sensitivity of the entrepreneurship effectiveness to the impact
of risks through taking of adequate and effective decisions. In the paper (Kail, 2008),
the risk tolerance of an enterprise is defined as a description of the corporation’s
ability to effectively continue its long-term operations in chosen industry markets,
regardless of the degree of impact of external and internal risk factors. From our
point of view, the last definition is the most complete interpretation of a risk-tolerant
decision, as it focuses not only on the risks confrontation, but also on the ability of
long-term effective continuation of operations. In this article, we will propose a
Concept of Taking Risk-Tolerant Financial Decisions Under Elevated Uncertainty 247

Fig. 1 Internal factors influencing company’s private financial risks. Source: Prepared by the
authors

concept of taking risk-tolerant financial decisions and advise on its application in

practice. The authors propose the following definition of the “risk-tolerant financial
decision”. It is a decision to manage the raising and distribution of the company’s
capital that is aimed at its effective competitive development, regardless of the
degree of impact of external and internal risk factors and the level of uncertainty.
In general, the decision-making process is as follows (McLaney, 2011; Orlov,
2022; Burlyaeva et al., 2007):
1. Generating the goal of implementing the decision;
2. Determining a sufficient range of modes of action and their consequences;
3. Gathering data related to decision making;
4. Evaluating the data gathered and developing an action plan aimed at
implementing the decision;
5. Analysis, evaluation, adjustment and refinement of the developed plan to imple-
ment the decision;
6. Implementation of and control over the concept of implementation of the decision
taken;
7. Monitoring and evaluation of implementation results of the decision taken.
In the process of implementing the stages of financial decision-making, one should
rely on the factors of the internal and external environment influence on risk factors.
Internal (micro-environment) and external (macro-environment) factors of financial
risk are shown in Figs. 1 and 2, respectively.
Structural risk may arise while managing the company’s costs and profits. This
risk manifests itself in the damage caused by a discrepancy between the costs
structure and the target market conditions. This type of financial risk is formed due
to ineffective structuring of operating costs and depends on the share of fixed costs in
the total costs of the corporation. Thus, a high level of fixed costs during sales
248 V. A. Kunin and S. I. Peshko

Fig. 2 External factors influencing company’s private financial risks. Source: Prepared by the
authors

slowdowns or a high level of variable costs during sales increases can significantly
reduce the company’s earning power and even result in unprofitability of its core
business and loss of financial stability.
One of the indicators of risk of loss of financial stability can be the behaviour of
the financial independence ratio and the comparison of this indicator with the
industry average values in the region of operations. The financial independence
ratio is determined as the ratio of equity to the total assets of the company and shows
the share of assets generated by equity.
Further, we will analyse the mechanism for applying the combined leverage
effect (Degree of Combined Leverage, DCL) determined by results of the compre-
hensive evaluation of joint impact of the effects of financial (Degree of Financial
Leverage, DFL) and operating (Degree of Operating Leverage, DOL) leverages and
the choice of a dividend policy when taking risk-tolerant financial decisions.
The analysis of scientific sources identified the following problematic elements in
the process of taking financial decisions under the elevated uncertainty:
1. insufficient knowledge of the joint impact of operating and financial leverages on
the risk of loss of the company’s financial stability;
2. insufficient formalisation of the maximum permissible value of the financial
leverage arm the excess of which results in an unacceptable increase in the risk
of financial stability;
Concept of Taking Risk-Tolerant Financial Decisions Under Elevated Uncertainty 249

3. lack of methodologies and algorithms for taking risk-tolerant financial decisions

in the capital structure management;
4. insufficient refining of advice on taking financial decisions under the uncertainty
based on economic and mathematical methods and taking into account in an
integrated manner the specific features of the market volatility, the costs structure
and the effectiveness of the company’s entrepreneurship;
5. no formalised methods for evaluating the influence of a change in the dividend
policy on the financial leverage arm and financial profitability of the company.
In accordance with the identified problematic elements in the process of taking
financial decisions, the purpose of this study is determined as follows: to develop
the methodology for taking risk-tolerant financial decisions focused on streamlining
the leverages on private financial risks of companies in the context of the most
reasonable limitation of these risks under the elevated uncertainty, and to advise on
the practical application of the methodology developed.
To achieve this goal, the following objectives of this study were set:
1. to evaluate the joint impact of operating and financial leverages on the risk of loss
of financial stability of the company and the maximum permissible value of the
financial leverage arm above which the risk of loss of financial stability becomes
unacceptable;
2. to develop the methodology and algorithm for taking risk-tolerant financial
decisions to manage the capital structure;
3. to develop the concept for implementing financial decisions on management of
the company’s debt capital and dividend policy under the uncertainty;
4. to evaluate the impact of a change in the dividend policy on the financial leverage
arm and financial profitability of the company;
5. to advise on taking risk-tolerant financial decisions under the elevated
uncertainty.

Materials and Methods

The studies carried out in this article are based on studies by Russian and foreign
authors published in the scientific economic literature and devoted to financial
management issues, including the issues of financial risk management, capital
structure management, shaping the dividend policy and taking risk-tolerant
decisions.
The study methodology is based on a dialectical systemic approach with appli-
cation of logical, factor and comparative analyses, methods of probability theory and
mathematical statistics, data synthesis and grouping with the use of the theoretical
framework for analysing the impact of financial decisions on financial risks, financial
standing and financial performance of the company. That said, special attention is
paid to studies on the management of structural risk, risk of loss of financial stability
and risk of bankruptcy. In this context, the article analyses in particular the materials
250 V. A. Kunin and S. I. Peshko

of scientific studies on the principles and limitations of using the operating leverage
and the impact of structural risk on the occurrence of risk of loss of financial stability.
In addition, an analytical method was applied to formalise threshold levels to
determine the maximum permissible values of the analysed indicators and the
method of tabular structuring of results to present the developed advice for managing
the capital structure and the dividend policy of the company.

Results

To study and to evaluate the risk tolerance of financial decisions and the expediency
of their taking, this article proposes to evaluate and monitor the joint impact of the
operating and financial leverages which is determined by the combined leverage
effect (DCL).
The DCL is comprehensively evaluated using the following formula:

DCL = DFL × DOL ð1Þ

When managing the costs structure and the process of raising and using the debt
capital, the company should take into account the joint impact of operating and
financial leverages which, if taken into account in an unprofessional manner, can
result in the loss of financial stability.
When we evaluate the leverages, we will first assume for the sake of clarity that
the balance of other income and expenses is equal to zero. Then the earnings before
interest and tax (EBIT) are determined by operating factors only and are the same as
the sales profit (operating profit).
The DFL may be calculated from income statement figures and from balance
sheet data. In financial practice, two concepts of understanding and evaluating the
financial leverage are used, i.e. American and European ones. In accordance with the
American concept, the financial leverage effect shows in percentage the change in
the company’s net profit if the operating profit increases by 1%, and it is measured
using the following formula:

EBIT
DFL = , ð2Þ
EBIT - IE

where IE is interest expenses.

In accordance with the European concept, the financial leverage effect shows in
percentage the change in the return on equity (financial profitability) of the company
due to raising and using additional debt capital, and it is measured using the
following formula:
Concept of Taking Risk-Tolerant Financial Decisions Under Elevated Uncertainty 251

D
DFL = ð1- t Þ × ðROA- r Þ × , ð3Þ
E

where t is a profit tax rate;

ROA is return on assets determined by the ratio of earnings before interest and tax
to the average value of assets;
r—is a weighted average debt capital rate;
D—is debt capital;
E—is equity.
In accordance with (3), the financial leverage effect is determined by the product
of three factors: the 1 - t tax corrector, the ROA-r differential and the leverage arm
determined by the D/E ratio. In this case, the tax corrector plays the role of a scaling
factor that weakens the effect, while the stronger the higher the profit tax rate, the
differential determines the effect sign and the leverage arm determines the strength
of its impact, which can be both positive and negative subject to the differential sign.
The operating leverage effect (DOL) shows in percentage the change in the sales
profit (operating profit) if the revenue changes by 1%. It appears from the definition
of operating leverage that in order to evaluate the joint impact of operating and
financial leverages, it is convenient to use the American interpretation of the
financial leverage. With this approach, the combined leverage shows in percentage
the change in the company’s net profit if the revenue changes by 1%.
If the revenue change is not accompanied by a change in fixed costs and a change
in the share of variable costs in the revenue, the operating leverage effect is measured
using the following formula:

EBIT þ FC
DOL = ð4Þ
EBIT

where FC are fixed costs.

The study (Donangelo et al. 2019) shows that companies with greater operating
leverage are more exposed to economic shocks. Thus, under the elevated uncer-
tainty, a low DOL value is more preferable, as it protects the company in the event of
a negative change in the market conditions. As Kunin (2014) shows, the strength of
the operating leverage effect is determined by two factors: the share of fixed costs in
the company’s total costs and the share of total costs in the revenue. If the total costs
are fixed, the company can pursue either aggressive, or balanced, or conservative
policy in relation to DOL. The aggressive policy is related to a high share of fixed
costs in the total costs and is coupled with a high level of structural risk.
The balanced or neutral policy is related to a moderate share of fixed costs in the
company’s total costs and is described by moderate structural risk, while the
conservative policy is focused on minimising fixed costs and, as a consequence,
minimising structural risk and chances of profit growth in case of favourable change
in the market conditions.
When raising the debt capital and, as a consequence, managing the DFL, it is
possible to use either the aggressive policy related to a relatively large amount of
252 V. A. Kunin and S. I. Peshko

debt financing, or the balanced or neutral policy related to a moderate level of debt
financing, or the conservative policy of minimising debt financing.
The authors believe that from the point of view of ensuring the company’s risk
tolerance one should adhere to the principle of direct dependence of the level of
conservatism of financial decisions taken on the level of uncertainty, even to the
point of refusal to raise debt financing under the excessively high uncertainty. With
this approach, when the uncertainty grows, the DFL indicator will tend to 1, which
indicates that there is no additional risk to the company’s equity. Thus, structural risk
remains to the equity only, which depends on the operating leverage.
Let us consider the impact of the combined leverage on the company’s opera-
tions. Transforming formula (1) subject to formulas (2) and (4), we arrive at the
following equation:

EBIT EBIT þ FC EBIT þ FC

DCL = × = ð5Þ
EBIT - IE EBIT EBIT - IE

By normalizing the numerator and the denominator of expression (5) by EBIT, we

will have:

1 þ EBIT
FC
DCL = ð6Þ
1 - EBIT
IE

It appears from (6) that the DCL depends on two factors: the ratios of the share of
fixed costs and interest expenses to EBIT.
As shown in Kunin and Peshko (2022), there are 4 levels of uncertainty: low,
below average, above average, high, with the boundaries of uncertainty levels that
are in the ranges
σT 2 ½0; σT - 2σ, σT 2 ðσT - 2σ; σT , σT 2 ðσT ; σT þ 2σ, σT 2 ðσT þ 2σ; þ1Þ,
respectively, where σT is a level of volatility of the analysed indicator for the
calculation period reduced to an annual expression, (σT ) is an average level of σT
for the entire analysed period, σ is a root-mean-square deviation of the volatility
level in the analysed period.
Under the high uncertainty, in order to ensure the company’s risk tolerance, the
DCL should tend to 0 thereby reducing the ratios of fixed costs and interest expenses
for the debt capital to EBIT. Under the elevated uncertainty, the risk-tolerant
financial decision should be described by the low DCL which enables to weaken
the combined effect of the financial and operating leverages when the risks occur.
With this in mind, in order to arrive at the best value of the combined leverage, we
suggest using the following strategies described in Table 1.
Thus, under the elevated uncertainty, when the company takes a financial deci-
sion subject to the combined leverage effect, it should rely on 3 basic scenarios with
the most balanced ratio of debt financing and fixed expenses, i.e.:
Concept of Taking Risk-Tolerant Financial Decisions Under Elevated Uncertainty 253

Table 1 Impact of debt financing and fixed costs on DCL

Fixed
expenses
Borrowed Large amount of fixed Balanced (average) Low or zero amount of
funds costs amount of fixed costs fixed costs
Large The DCL value tends to The DCL is above aver- The indicator takes
amount of infinity, provided that age, which is in line with average values which is
borrowed EBIT>IE, which indicates a rather aggressive in line with a moderate,
funds high sensitivity of the financial policy balanced financial
business to the market policy
conditions
Balanced The DCL is above aver- The indicator takes The DCL is below aver-
(average) age, which is in line with a average values which is age which is in line with
amount of rather aggressive financial in line with a moderate, a conservative financial
borrowed policy balanced financial policy
funds policy
Low or zero The indicator takes aver- The DCL is below aver- The DCL value tends to
amount of age values which is in line age which is in line with 1 which is in line with a
borrowed with a moderate, balanced a conservative financial high level of financial
funds financial policy policy policy conservatism that
hinders the company
development
Source: Prepared by the authors

1. large amount of borrowed funds and low fixed expenses;

2. average amount of borrowed funds and fixed expenses;
3. low amount of borrowed funds and high fixed expenses.
Under the elevated uncertainty of market conditions due to the growth of structural
risk, it seems logical to assume that a large amount of fixed expenses can result in
large losses. Therefore, the risk to the company’s equity will constantly increase.
During the 2020 pandemic, many companies were unable to continue their opera-
tions in a number of industries due to the high level of fixed expenses, as they faced
inevitable cash gaps due to a decrease in cash flows from their core business.
Furthermore, under the elevated uncertainty, the payment of debt financing becomes
quite challenging, which increases the risk of loss of financial stability in aggregate.
When deciding on the expediency of raising additional debt capital on these
conditions, the key issue is determining the maximum permissible value of the
financial dependence coefficient (the financial leverage arm) and, as a consequence,
the maximum permissible amount of debt capital, above which the risk of loss of
financial stability becomes unacceptably high. The authors believe that in order to
solve this task one should rely on the European concept of financial leverage. In this
case, it is necessary to take into account potential changes in the market conditions
which are typical of the elevated uncertainty, and, as a consequence, a decrease in the
revenue and economic profitability. The methodology proposed by the authors for
determining the maximum permissible amount of additional debt capital under the
254 V. A. Kunin and S. I. Peshko

elevated uncertainty consists of the following stages containing the analytical esti-
mates obtained by the authors:
1. Estimate of the maximum permissible relative decrease in the revenue above
which the risk of loss of financial stability occurs

TC
δRlim = 1 - , ð7Þ
R

where
TC
R is a share of total costs in the revenue.

2. Estimate of earnings before interest and tax with the maximum permissible
decrease in the revenue

EBIT lim = Δ, ð8Þ

where
Δ is a balance of other income and expenses.
3. Estimate of the minimum permissible level of economic profitability below
which the risk of loss of financial stability occurs

EBIT lim
ROAmin = ð9Þ
A - R  δR

4. Estimate of the maximum permissible value of the financial dependence coef-

ficient and the maximum permissible amount of debt capital by the formulas

D ROE 0
=- , ð10Þ
E max ð1 - t Þ × ðROAmin - r Þ

where
ROE0 is return on equity (financial profitability) before raising debt capital.
The application of the proposed methodology is aimed at increasing the risk
tolerance of the financial decisions taken to raise additional debt capital and to
mitigate the risks of loss of financial stability, which is especially important under
the elevated uncertainty and economic turbulence.
The block diagram of implementation of the algorithm for taking risk-tolerant
financial decisions to raise debt capital is shown in Fig. 3.
It should be noted that the monitoring whether an actual decrease in the revenue is
permissible in the event that the market conditions deteriorate may be carried out
based on results of comparing this decrease with the maximum permissible decrease
evaluated using formula (7).
The optimal structure of sources of financing may be determined also using
WACC (Weighted Average Cost of Capital) which is defined as an average interest
Concept of Taking Risk-Tolerant Financial Decisions Under Elevated Uncertainty 255

Fig. 3 Block diagram of the algorithm for taking a risk-tolerant financial decision to raise debt
capital. Source: Prepared by the authors

rate for all sources of financing, subject to their share in the structure of the
company’s liabilities. If the WACC < ROE condition is met, this indicates a positive
impact on the total value of the company’s liabilities and a possibility to raise
additional debt financing. In this case, one should consider that under the conditions
of turbulence, each new loan is highly likely to be issued at a higher interest rate
which is related to the growing risk, so the above condition shall be met to minimise
potential risks.
An important factor in increasing the company’s financial stability under the
elevated uncertainty is taking of risk-tolerant financial decisions in the area of a
dividend policy. Under the elevated uncertainty, a risk-oriented dividend policy
enables to reduce the company’s dependence on debt capital and thereby to increase
its financial stability.
Let us denote the relative change in net profit reinvested in business development
in case of a change in the dividend policy as δNPI. Then the relative change in the
financial leverage arm in case of a change in the dividend policy is determined by the
equation

δNPI  ROE 0
δFLA = - ð11Þ
1 þ δNPI  ROE 0

It appears from (3) that the relative change in the financial leverage effect under the
impact of a change in the dividend policy corresponds to the relative change in the
leverage arm and the following equation is satisfied

δDFL = δFLA ð12Þ

In our opinion, the implementation of the dividend policy under the elevated
uncertainty should be based on the following basic provisions:
1. The dividend policy should be focused on preventing the occurrence of risks of
loss of financial stability and bankruptcy;
256 V. A. Kunin and S. I. Peshko

2. When implementing the dividend policy, sufficient financing for operating and
investment activities should be ensured by the criterion of ensuring the required
pace of business development;
3. The dividend policy should not be implemented to the detriment of founders’ and
shareholders’ interests and should flexibly ensure, subject to the stage of the
company’s life cycle and external conditions, a balance of interests related both to
keeping the company’s stable functioning and ensuring its competitive develop-
ment and to satisfying their personal needs.
Adhering to these basic provisions enables to increase the risk tolerance of financial
decisions in the area of a dividend policy and, as a consequence, the sensitivity of the
company’s operating and investment performance to the impact of risks and the level
of uncertainty.

Discussion

Discussion of the Conditions for Applicability of Analytical

Estimates of Operating, Financial and Combined Leverages

The above formulas for evaluating the financial, operating and combined leverages
are based on the assumption that the value of Δ, i.e. the balance of operating income
and expenses, is equal to zero. If Δ≠0, the difference EBIT -Δ should be used instead
of EBIT in formulas (2), (4), (5) and (6).
An important aspect of the practical application of the above formulas (4) to (6)
for evaluating the operating and combined leverages is the limitations on
the applicable scope of those formulas. These known estimates are based on the
assumption that a change in the revenue is not accompanied by a change in the level
of fixed costs and the share of variable costs in the revenue. These assumptions are
met in case the revenue decreases as the market conditions deteriorate and the
company’s management does not take any control actions to restructure the costs
and increase the revenue. If the deterioration in the market conditions is accompa-
nied by such control actions, the effect of operating leverage should be evaluated
using the formula developed in Kunin (2014), which is below:

bc - kF  f - f  ðc - 1Þ
DOL = , ð13Þ
ð b - 1Þ  ð c - 1 Þ

where
b—is a coefficient of change in revenue;
с—is a “starting position” of the company determined by the ratio of revenue to
revenue at the break-even point before its change and application of control actions;
kF—is a coefficient of change of fixed costs under the influence of control actions;
Concept of Taking Risk-Tolerant Financial Decisions Under Elevated Uncertainty 257

f—is a coefficient describing the change in the share of variable costs in the
revenue due to the influence of external factors and control actions and determined
by the ratio of marginal profits before and after the change in revenue and application
of control actions.
Accordingly, when evaluating the combined leverage in case the control actions
are taken, one should substitute in (2) the evaluation of the operating leverage by
formula (13).
As shown in Kunin (2014), formula (4) is a particular case of formula (13) in case
there are no control actions and the balance of other income and expenses is equal
to 0.

Discussion of the Evaluation of Impact of a Change

in the Dividend Policy on the Financial Leverage Arm

It should be noted as regards the evaluation of the impact of a change in the dividend
policy on the financial leverage arm, that the degree of this impact will depend on the
return on equity before the change in this policy. Indeed, the following passages to
the limit appear from formula (10):

ROE 0 → 0 ) δFLA ) 0 ð14Þ

and

δNPI
ROE 0 → 1 ) δFLA → - ð15Þ
1 þ NPI

It appears from expressions (14) and (15) that the tightening of the dividend policy is
an effective tool for influencing the arm and the financial leverage effect for highly
profitable companies only. As the return on equity decreases, the impact of tighten-
ing the dividend policy on the capital structure declines.

Discussion of Advice on Taking Risk-Tolerant Financial

Decisions Under the Elevated and High Uncertainty

Under the elevated and high uncertainty, it is especially important to take risk-
tolerant financial decisions that will enable the company to increase the confronta-
tion against such financial risks as risks of loss of financial stability, insolvency and
loss of liquidity and, as a consequence, risk of bankruptcy. Based on the material
provided in this article, we can propose the following matrix for taking risk-tolerant
258 V. A. Kunin and S. I. Peshko

Table 2 Advice on streamlining the DCL and shaping the dividend policy under the uncertainty
Level of
uncertainty Above average High
Fixed Decreasing fixed expenses, increasing Minimising fixed expenses, maximiz-
expenses the share of variable expenses in the total ing the share of variable expenses to
costs structure streamline the DCL
Borrowed Pursuing a moderately conservative Pursuing an ultra-conservative policy of
funds policy for raising borrowed funds which raising borrowed funds which manifests
should be manifested in: itself in:
1. Minimisation of additional short-term 1. Cessation of increasing the share of
borrowed funds in order to minimise the borrowed funds in the structure of the
interest amount and to mitigate the risk company’s liabilities;
of non-payment; 2. Refusal to raise new credit facilities
2. Minimisation of interest payments in to finance short-term projects or current
case of debt financing of the investment assets;
activities by streamlining the structure of 3. Minimisation of loan payments and
sources of financing with the raising of interest rates for existing loans in order
modern bond financing facilities; to release funds.
3. Transfer of existing medium-term
borrowed funds to long-term ones, pro-
vided that the interest rate decreases, in
order to release additional funds;
4. Exploring whether the operations may
be financed through a more stringent
dividend policy aimed at reducing
financial dependence and mitigating risk
of loss of financial stability.
Dividend Pursuing a more stringent dividend pol- Implementing the dividend
Policy icy, among other things: minimisation policy in order to reduce
1. Setting dividend payout limits by the financial dependence and to mitigate the
criterion of ensuring a permissible value risk of loss of financial stability
of the financial leverage arm;
2. Preventing the dividend payout ratio
and the dividend payout fund from
exceeding the maximum permissible
values.
Source: Prepared by the authors

financial decisions on raising borrowed funds and determining the dividend policy
under the elevated uncertainty as presented in Table 2 below.
The obtained results can be used to determine risk-tolerant financial decisions
under the above average and high levels of uncertainty.
Adhering to the concept of taking risk-tolerant financial decisions is the key to the
company’s stable functioning under the elevated uncertainty as it decreases the
impact of potential risks on its financial performance.
Concept of Taking Risk-Tolerant Financial Decisions Under Elevated Uncertainty 259

Conclusion

This article analyses the essence of risk tolerance of a corporation and defines the
concept of a risk-tolerant financial decision. Based on the proposed concept focused
on evaluating and monitoring the impact of the combined leverage that combines the
effects of operating and financial leverages, the methodology was developed and the
algorithm was proposed for taking risk-tolerant financial decisions on the capital
structure management. Analytical estimates of the maximum permissible financial
leverage arm were obtained, and advice was given on the application of these
analytical results in case of raising debt capital and financial monitoring. With
respect to ensuring that risk-tolerant financial decisions are taken on the dividend
policy, the article evaluates the impact of tightening the dividend policy on the
financial leverage arm and examines the dependence of the effectiveness of the
dividend policy tightening on return on equity. Based on the results of the studies in
the article, advice is given on taking risk-tolerant financial decisions at different
levels of uncertainty.
Corporations operating in the real economy may be interested in the use of the
results obtained in order to determine the optimal capital structure and dividend
policy to keep the required balance between various sources of financing for the
purpose of avoiding the growth of risks of loss of financial stability.
The authors believe that potential areas for further study may be development of
an algorithm for taking financial decisions on managing the debt capital structure
based on metrics that are not limited solely to financial and operating leverages. In
this case, the impact of a change in the dividend policy may also be evaluated by
other methods that are not described herein.

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Reflection of the Sustainable Development
Goals in Citizen Science Projects

Natalia Vasilenko and Anna Rumyantseva

Introduction

To achieve the Sustainable Development Goals (SDGs) formulated in 2015, the UN

General Assembly adopted the document titled “Transforming our world: the 2030
Agenda for Sustainable Development”, which implies that the international com-
munity, nations, businesses, and individual citizens will focus on transforming the
ways of life to support the planet’s population by balancing economic, social, and
environmental interests within the framework of a triune approach (Starikova, 2017).
Despite the fact that the SDGs are universal, complement each other, and shape a
complex system, each country designs an individual SDG pathway that factors in the
current state of the national economy (Tolstykh & Kondratieva, 2021). In 2017, the
Russian Federation included 90 indicators from the global list in its Federal State
Statistics Service monitoring plan. In 2020, a study was conducted on the integration
of the SDGs into the public administration system, which covered the issues of
providing the necessary data and technologies (Molyavko, 2021).
In order to solve problems associated with the rational use of limited natural
resources, preserving biodiversity, ensuring decent working conditions and pay, and
providing opportunities for the holistic development of each person, it is necessary to
advance scientific knowledge with a focus on its practical application (Sokolova,
2020; Swanson et al., 2016). However, achieving the SDGs not only requires that
research results be of practical feasibility and high social significance; it also takes a
lot of resources, including workforce (Kosmala et al., 2016), and necessitates that the
resulting knowledge and competencies become part of social and economic pro-
cesses and practices.

N. Vasilenko (✉) · A. Rumyantseva

Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 261
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_23
262 N. Vasilenko and A. Rumyantseva

In this respect, citizen science seems to be a promising tool, as it is a form of

scientific communication based on the integration of the efforts made by profes-
sional researchers and volunteers wishing to take part in scientific projects. The
purpose of the study is to identify the possibilities of using citizen science in SDG
achievement.

Materials and Methods

The research methodology is based on the following assumptions. Approaches to

achieving sustainable development, which implies keeping the balance between a
developing object and its environment, originated in the 1980s. They are designed
by means of decomposing the global economy into national, regional (Starikova,
2017), and corporate levels, with the latter incorporating ESG principles (Sokolova
& Teymurov, 2021). For their functioning, economic systems require development;
development requires change, and change, in turn, requires transitioning to a new
state of equilibrium of the economic system, which is assessed through a balance
between multidirectional environmental, economic, and social interests (Guzey,
2021). This decomposition contributes to the involvement of an increasing number
of stakeholders (participants with different social characteristics and statuses) in
solving sustainable development problems. This happens, for instance, in citizen
science, which can be viewed as a new cognitive paradigm in the context of
digitalization and digital transformation of various aspects of social and economic
life (Linders, 2020).
To achieve the goal of the study, citizen science should be considered at two
levels:
– at the conceptual level, it is a specific form of cognition that takes place in the
course of open scientific communication (Irwin, 1995) that is based mainly on
horizontal transactions integrating the actions of professional researchers and
volunteers (Gazoyan, 2020; Makhnach et al., 2019);
– at the empirical level, it is a system of projects which aim to solve socially
significant problems (Bonney & Dickinson, 2012), are implemented in accor-
dance with procedures designed by professional scientists, and provide mainly
non-monetary rewards to volunteers, who have different social characteristics
(Muravyeva & Oleinikova, 2021).
In our study, we used such tools as analysis, synthesis, comparison, and classifica-
tion. We also applied knowledge-based (Pirozhkova, 2018; Surovieski, 2007),
participatory (Jenkins, 2006; Mueller et al., 2022; Volkova, 2019), and network
(or digital) approaches (Bonney & Dickinson, 2012; Mazumdar et al., 2017; Saraeva
et al., 2021).
The study used analytical materials and data from the Russian Association for
Science Communication (AKSON, https://akson.science/), the Federal State Statis-
tics Service of the Russian Federation (Rosstat, https://rosstat.gov.ru/), the European
Reflection of the Sustainable Development Goals in Citizen Science Projects 263

Citizen Science Association (ECSA, https://ecsa.citizen-science.net/), and such

online citizen science platforms as Citizen Science Games (https://
citizensciencegames.com/), Experion (https://experion.citizen-science.ru/),
Scistarter (https://scistarter.org/), Zooniverse (https://www.zooniverse.org/), and
others.

Results

In terms of SDG achievement, citizen science looks promising as it includes

knowledge-based, technological, and participatory domains.
The knowledge-based domain manifests itself in the SDGs’ becoming a measure
of the relevance and social significance of research topics. The practical relevance of
citizen science projects lies in using information produced by means of
crowdsourcing in decision-making at national, regional, and corporate levels to
achieve the SDGs.
The technological domain is created by the digital environment, in which citizen
scientists develop their communication and network skills in the course of collecting
and interpreting data, including big data, to achieve the SDGs. The technological
domain contributes to SDG achievement at two levels:
– fostering scientific thinking, research skills, and digital skills to solve sustainable
development problems;
– using the network effect of the digital environment to increase the number of
stakeholders in transforming the world in line with the SDGs.
The participatory domain contributes to the dissemination of sustainable develop-
ment norms and values by involving an increasing number of participants interested
in SDG achievement and fostering their effective cooperation in the course of open
scientific communication. The participatory domain grows in its importance as
volunteers improve their competencies and move up the management ladder in the
citizen science sector.

Discussion

The Contribution of Citizen Science Projects to SDG

Achievement: The Knowledge-Based Domain

Most of the SDGs are complex in nature, and their achievement involves
maintaining balances in various combinations of environmental, social, and eco-
nomic aspects of the interaction between the population and the environment. Based
on the key national indicators of the Russian Federation, Table 1 divides the SDGs
264 N. Vasilenko and A. Rumyantseva

Table 1 Reflection of the SDGs in the knowledge-based domain of citizen science projects
Aspects of interaction between
the population and the
environment
SDG Ecology Society Economy Research interests in citizen science projects
SDGs 3, 6, + + + Health of various population groups; the qual-
7, 9, 11, 17 ity of drinking water and water-related ecosys-
tems;
Access to energy; the quality of social infra-
structure; urban development; urban environ-
ment quality; personal security; corruption
manifestations.
SDGs 1, 2, + + Access to education, including such aspects as
4, 5, 8, 10, gender and inclusion; digital access; the devel-
16 opment level of IT skills; gender equality in
political and economic decision-making pro-
cesses; working conditions and pay satisfac-
tion; financial literacy.
SDGs + + Consumption and production aspects in
12, 13, preventing natural disasters and pollution;
14, 15 waste management; carbon footprint measure-
ment and reduction; marine and land biodiver-
sity conservation.
Source: Compiled by the authors using data from https://www.un.org/sustainabledevelopment/ru/
sustainable-development-goals/ and https://rosstat.gov.ru/sdg/report/document/69771

into three groups depending on the balance they aim to achieve. Table 1 shows that
each SDG group is reflected in the research areas covered by citizen science.
However, as a rule, each citizen science project has a rather narrow focus, covering
only a part of the parameters of a particular sustainable development goal.
An analysis of online citizen science platforms in the context of a triune approach
(Starikova, 2017) allows us to conclude that, to one degree or another, citizen
science projects make meaningful contributions to achieving and keeping sustain-
able development balances (Table 2).
Citizen science projects not only have value in terms of their contribution to SDG
achievement, which may sound like an abstract goal. They have practical signifi-
cance because their results, which are obtained by processing numerous data, can
serve as a more objective basis for decision-making at national, regional, and
corporate levels to build a better world for all the inhabitants of our planet.
Reflection of the Sustainable Development Goals in Citizen Science Projects 265

Table 2 Reflection of sustainable development balances in citizen science projects

Online platforms
Citizen Sustainable
Citizen science Science development
project topics Scistarter Zooniverse Games Experion balances achieved
Agriculture + Ecology—society—
economy
Climate science; + + + Ecology—society—
hydrology; Earth economy
science
Physics; quantum + + + Ecology—society—
computing; economy
neuroscience,
IT; mathematics + Ecology—society—
economy
Medicine; biomedi- + + + Ecology—society—
cine; genetics economy
Behavioral science; + Ecology—society—
cognitive science economy
Archeology; culture + + Society—economy
Arts; history; lan- + + + Society—economy
guage; literature
Social sciences + + + Society—economy
Animals; birds; + + Ecology—economy
biodiversity
Astronomy; space + + + Ecology—economy
Biology; nature + + + + Ecology—economy
Source: Compiled by the authors using data from https://scistarter.org/, https://www.zooniverse.
org, https://citizensciencegames.com, https://experion.citizen-science.ru

The Contribution of Citizen Science Projects to SDG

Achievement: The Technological Domain

Most citizen science projects either depend on a digital environment or are mediated
by it (Haklay et al., 2018; Maltsev & Maltseva, 2020). This is explained by the use of
digital tools to perform the following tasks:
– collecting data; storing observation results, including photographs; public sur-
veys; providing information about personal health for research programs;
– independent primary processing of information about the objects under study,
including such operations as object recognition, comparison, and classification;
– recovery of hidden or partially lost data; text processing and translation;
– data analysis during simulation using various gaming platforms, etc.
With the latest digital solutions, a volunteer in environmental projects can measure
air temperature, sound volume, vibration intensity, and other parameters using smart
devices and IoT and transmit measurement results in real time via mobile
266 N. Vasilenko and A. Rumyantseva

applications and wireless networks to the cloud storage. In addition, drones equipped
with video cameras can help collect the necessary information in hard-to reach
places, and geolocation services can check and confirm location and time metadata
(Mazumdar et al., 2017). Image processing and recognition applications greatly
facilitate biodiversity conservation projects. An example is the Penguin Watch
project (https://www.zooniverse.org/projects/penguintom79/penguinwatch), which
relies on satellite images to track adult penguins, their chicks and eggs. Citizen
science projects using gamification to model the protein’s structure (Foldit; https://
fold.it) or brain activity (Mozak; https://www.mozak.science) can be enhanced with
virtual or augmented reality tools.
The results of many citizen science projects can be presented in the form of digital
resources, including interactive ones. Examples include the Distribution of Invasive
Plant Species website (https://ib.komisc.ru/add/rivr/), a map of light pollution
(Globe at Night, https://www.globeatnight.org/), etc. The widespread use of online
services and cloud technologies at the stage of data processing and storage improves
metadata generation, updating, and correction and facilitates interaction between
databases (Fataliev & Verdieva, 2021). All this automates observations and infor-
mation processing, reducing the number of errors and contributing not only to the
achievement of the project’s goals but also to the development of its participants’
digital skills (Aristeidou & Herodotou, 2020).
The Internet is an environment that makes it possible to attract a wide range of
citizens to participate in research projects both online and offline, which is limited
only by levels of motivation and access to digital technologies. Citizen science
projects create opportunities for solving the problem of inequality, which has
many manifestations (Maltsev & Maltseva, 2020) ranging from limited access to
education to gender inequality. Moreover, as the circle of participants aware of how
citizen science projects contribute to SGD achievement becomes wider, it helps raise
awareness of the SDGs by means of the network effect.

The Contribution of Citizen Science Projects to SDG

Achievement: The Participatory Domain

The involvement of non-professional volunteers in citizen science projects can be

viewed as the implementation of the participation principle or the involvement of
citizens in the process of making decisions in socially important areas.
The extension of the principle of participation to the field of scientific research not
only leads to the democratization of science but also promotes intercultural dialog,
social integration based on respect for cultural diversity (Dokhkilgova, 2021), and
awareness of the need to join forces to build a better future, along with sustainable
development norms and values.
These norms and values are shaped in the volunteering process, which happens at
different participation levels (Haklay et al., 2018). At the lower level,
Reflection of the Sustainable Development Goals in Citizen Science Projects 267

non-professional volunteers collect and share their data, seeing only the surface of
the research. Examples include the eBird project for bird tracking (https://ebird.org/)
or the CrowdWater project for measuring water quality (https://crowdwater.ch/en/
aboutus/). At the next level of the so-called distributed intelligence, participants
perform the primary analysis and basic interpretation of the data and become aware
of a problem that reflects one or more of the SDGs. Examples include the Weather
Rescue at Sea project devoted to climate change (https://www.zooniverse.org/
projects/p-teleti/weather-rescue-at-sea/) or the Old Weather project (https://www.
oldweather.org/shipping_office.html).
The next levels of research participation involve setting research objectives,
choosing data processing methods, etc., up to volunteers interacting with scientists
on almost equal terms during project implementation. These are the levels where an
understanding comes of possible directions and ways to solve a particular problem in
order to achieve the SDGs, which happens in the course of acquiring experience in
reconciling public interests and responsibilities.

Conclusion

The SDGs, along with national SDG pathways, foster countries to consolidate efforts
to improve human lives and create conditions for development without causing
irreversible damage to the environment. Countries strive to achieve the SDGs at
different levels—national, regional, corporate, etc.—of economic systems. Citizen
science, which is done in the form of projects, is another of these levels at which
volunteers contribute to professional research. This level reflects the traditions of
civic participation in research activities, which involve producing new results that
have value for the field of sustainable development, including methods and tools for
monitoring SDG achievement.
The relationship between the SDGs and citizen science projects is manifested in
the fact that the SDGs set a framework for the content of projects, guiding their
participants to obtain results that can be applied in real life to achieve a balance
between social, environmental, and economic aspects of society. Also, as a form of
acquiring new knowledge, citizen science promotes the dissemination of sustainable
development values, the development of intellectual and practical skills for solving
social and environmental problems, gaining experience in cooperation, and personal
growth. In addition, the data collected by citizen scientists contribute to raising
awareness of various aspects of life and the current state of the environment,
covering areas ranging from monitoring climate change to providing better access
to medical care and quality education. This contributes to making better-informed
decisions at various levels to achieve the SDGs.
The authors believe that further research can be done into approaches to the
integration of citizen science projects and sustainable development processes at the
levels of content, tools, and values.
268 N. Vasilenko and A. Rumyantseva

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Personnel Risks of Media Organizations:
An Approach from the Standpoint
of the ESG Concept

Vladimir A. Plotnikov and Olga A. Shamina

Introduction

In modern conditions, the issues of balanced social, economic, and environmental

development are of great importance. This is reflected in the Sustainable Develop-
ment Concept, which is considered in numerous studies (Fedotova et al., 2021;
Jänicke, 2012; Khan et al., 2021; Mizutori, 2019; Söderholm, 2020; Stoenoiu, 2022;
Vertakova et al., 2020). The importance of this concept is so high that it has been
enshrined at the international level in the system of the UN Sustainable Development
Goals (Szopik-Depczyńska et al., 2018; UN, 1987, 2012, 2019; UNEP, 2019).
Naturally, this has led to the incorporation of elements of sustainable development
into public administration (Collins et al., 2022; Vertakova & Plotnikov 2017; York
et al., 2022) in many countries and regions.
The Russian Federation is no exception, which adopted: Decree of the President
of the Russian Federation of 04/01/1996 No. 440 “On the Concept of the Russian
Federation’s transition to sustainable development”, Decree of the President of the
Russian Federation of 02/08/2021 No. 76 “On measures to implement the state
scientific and technical policy in the field of environmental development of the
Russian Federation and climate change”, Decree of the Government of the
Russian Federation dated September 21, 2021 No. 1587 “On approval of the criteria
for sustainable (including green) development projects in the Russian Federation and

V. A. Plotnikov (✉)
Saint-Petersburg State University of Economics, St. Petersburg, Russian Federation
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
O. A. Shamina
Saint-Petersburg State University of Industrial Technologies and Design, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 271
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_24
272 V. A. Plotnikov and O. A. Shamina

requirements for the verification system for projects of sustainable (including green)
development in the Russian Federation”, and many other documents.
Business is showing some caution in the active transition to business models
based on the Sustainable Development Concept. This is due to the insufficient
number of economic incentives for such a transition (Arslan et al., 2021;
Treepongkaruna et al., 2022). It is traditionally believed that the main goal of the
functioning of the company is profit maximization. The manifestation of environ-
mental and social responsibility of business requires additional efforts and costs. As
a result, responsible behavior of firms reduces their financial performance, which can
be negatively perceived by investors and owners. Therefore, businesses, especially
small and medium ones, do not deny the need for sustainable development, but
approach the implementation of relevant projects with caution. Big business is very
active in solving the problems of sustainable development. Large companies, firstly,
have large resources, and secondly, they are more integrated with society and public
authorities.
To promote the ideas of sustainable development in the business environment, the
ESG concept (Mansouri & Momtaz, 2022; Parrish, 2010; Volkmann et al., 2021)
was developed. Its name is formed from the terms: Environmental + Social +
Corporate Governance (ESG). This concept is focused on the management of the
firm, which achieves its involvement in solving environmental, social, and manage-
rial problems. Those. it is a mechanism for engaging business in sustainable devel-
opment. The use of the ESG concept allows not only declaring the firm’s
commitment to the principles of sustainable development, but also forming a system
of indicators. These indicators (quantitative and qualitative) make it possible to
assess the degree of compliance of the activities of a particular company with the
Sustainable Development Concept.

Materials and Methods

It is important to note, firstly, that the degree of significance of each of the ESG
components in different industries and even in different types of economic activity of
an individual company can be different. This requires the creation of individual
systems of ESG indicators. Secondly, an analysis of the literature and practical cases
shows that the focus in the implementation of the ESG concept is on two of the three
components related to business responsibility (OECD, 2022). This is done by
implementing the relevant principles:
– Environmental principles determine how much a company cares about the envi-
ronment and rational use of natural resources, what measures it takes to reduce
damage to the natural environment.
– Social principles form the relationship of the company with key stakeholders such
as staff, suppliers, partners, consumers, the local community, and society, and
other.
Personnel Risks of Media Organizations: An Approach from the Standpoint. . . 273

– Governance principles affect the quality of company management. This quality

can be assessed by many indicators: transparency of reporting, approaches to
personnel management, anti-corruption measures, and many others.
As a rule, the main attention in the implementation of the ESG concept is given to the
Environmental and Social components. This is explained by the fact that it is their
addition to traditional business management principles that demonstrates the transi-
tion to sustainable development. Without these components, a company cannot be
considered sustainable. That is, some “bias” is formed in the perception of the ESG
concept. Its presence, among other things, forces small companies to exercise
caution in the transition to it.
The Governance component is just as important. It is its more detailed study that
underlies the author’s analysis and the results described in the article. To give the
results a concrete character, we studied the business structures of an industry that is
important for the digital transition era - media organizations. The Governance
component of media organizations was considered through the prism of the quality
of personnel risk management.

Results

The transfer of business processes and communications to the online space testifies
to the digital transformation of the economy, the main resource of which is infor-
mation (data) (Peng & Tao, 2022; Plekhanov et al., 2022). The traditional sources of
competitive advantage in the form of raw materials and capital are giving way to the
intangible assets of companies. The fundamental basis of the strategic advantages of
a business has become its human resources. Important are such characteristics of the
staff as: attitude to work, motivation to achieve goals, professionalism, value system,
ability to be creative, ability to change, etc.
In modern conditions of a high degree of uncertainty and dynamism of the
business environment, it becomes vital to consider the impact of personnel risks
on achieving the goals of the functioning of media organizations. This is due to the
high contribution of employees to damage companies. According to PwC (source:
https://oilru.com/news/513068/), in 46% of cases, the perpetrators of economic
crimes are their own employees. Only 33% are external violators. Most of the
remaining cases involve collusion between internal and external parties. The process
of improving the quality of the governance of a media organization is shifting to the
area of personnel risk management.
In these conditions, an effective personnel strategy is of great importance. The
processes of formation and implementation of the personnel strategy are correlated
with similar processes of the basic strategy, concretizing, and developing its pro-
visions related to the field of personnel management. The goal of the personnel
strategy is to find a balance between the number and competence of the workforce
and the possibilities for their promotion and development, considering ESG
274 V. A. Plotnikov and O. A. Shamina

principles. The process of developing and implementing a personnel strategy

includes five stages:
– At the first stage, an analysis of the external and internal environment is carried
out, which affects the formation of the organization’s human resources potential.
In this case, it is advisable to conduct a PEST analysis. This analysis considers the
requirements of sustainable development, political restrictions, labor legislation,
migration factor, demographic situation, unemployment rate, etc. The internal
factors in the formation of personnel strategy include: the basic strategy of the
organization; life cycle stage; corporate culture; availability of memorandums of
commitment to the Sustainable Development Goals; organizational structure of
the company; leadership style; key competencies of personnel, etc.
– The second stage is devoted to defining the goals and objectives of the personnel
strategy, that is, the desired result. The goals and objectives of the HR strategy
must necessarily correlate with the goals and objectives of the basic strategy, as
well as consider the commitment to ESG principles.
– The third stage is the development of a plan of measures necessary to achieve the
goals and objectives of the personnel strategy. Workforce planning is performed
in accordance with the current and future needs of the organization. Based on this
plan, standard procedures are carried out: selection of candidates for a vacant
position; admission of the most suitable of the candidates; adaptation of new
employees. During the adaptation, the newcomer not only gets acquainted with
the organization and business processes, but also with the accepted rules of
conduct and communication, which consider ESG principles. In the future,
planning and regulation of personnel development processes are carried out.
– At the fourth stage, information is prepared on the necessary financial and
resource support for the personnel strategy. A system of indicators for evaluating
its effectiveness is set. In modern conditions, an obligatory element of this system
of indicators are ESG parameters.
– The fifth stage is focused on monitoring and controlling the implementation of the
personnel strategy. Monitoring and control are carried out over the implementa-
tion of all planned activities with fixing the reasons for their non-fulfillment or
improper fulfillment for the subsequent adjustment of the personnel strategy
itself.
The influence of environmental factors, which are the main source of ESG risks, is
reflected in the content of the company’s basic strategy. In the future, this is reflected
in private strategies. The relationship between the basic and personnel strategies of
media organizations is presented in Table 1.
Managing the personnel of media organizations is fraught with risks. The classi-
fication of risks is their structuring according to special features. With the help of
classification, effective methods of risk management are developed. This approach
allows considering the specifics of specific risks. Table 2 shows the influence of the
factors of the external environment of a media organization, and the personnel risks
associated with this are identified.
Personnel Risks of Media Organizations: An Approach from the Standpoint. . . 275

Table 1 The relationship between the basic and personnel strategies of a media organization
Components of the HR
General strategy HR strategy strategy
Growth strategy (due to a Management through the Recruitment, adaptation of
unique offer, including in the encouragement of enthusiasm personnel: search for young
field of innovative and initiative, team building. people who can be inspired by
technologies). the idea, enterprising, contact,
able to take risks, bring things
to the end, executive special-
ists-innovators.
Staff development: informal,
leader-mentor oriented.
Evaluation of personnel and
working conditions: based on
results, not too harsh.
Staff remuneration: impartial,
fixed, with the possibility of
growth.
Consumer-focused strategy Management through optimi- Recruitment, adaptation of
(concentration on a specific zation and streamlining of the personnel: search for mature,
group of customers, as well as staff structure, narrow profes- responsible professionals.
specialization in certain sional specialization. Personnel development:
products). emphasis on high-quality pro-
fessional growth.
Assessment of personnel and
working conditions: narrow,
high-quality, result-oriented.
Staff remuneration: fixed,
based on merit and seniority,
with a developed system of
non-material incentives.
Differentiation strategy Management through belong- Recruitment, adaptation of
(focusing the organization’s ing to a team and development personnel: search for diversi-
efforts on several priority of internal competition. fied, dedicated, ambitious
areas). specialists.
Staff development: advanced
training, career opportunities.
Assessment of personnel and
working conditions: based on
clearly defined criteria.
Remuneration of staff: based
on merit and intra-
organizational perceptions of
fairness.
Source: Developed by the authors using the results of Izhbulatova (2008)

When assessing the degree of risk impact on the economic security of a media
organization, the following scale was used: very low, low, medium, high, very high
degree of impact. It should also be noted that the column “Environmental factors
affecting the personnel management of media organizations (the degree of influence
of the factor)” presents the results of our earlier study (Plotnikov et al., 2022).
276 V. A. Plotnikov and O. A. Shamina

Table 2 Environmental factors and risks of the media organization

Environmental factors External risks The degree of
affecting the personnel affecting the risk impact on
management of media personnel The impact of external the stability of a
organizations (the degree management of media risks on personnel media
of influence of the factor) organizations risks organization
1. Geopolitical factors
1.1. Future and current Risk of martial law in Staffing risks: no sig-
legislation governing the the country nificant risks identified
rules of the industry (2) Risks of High
personnel use: risk of
deterioration in the
moral and psychologi-
cal climate
Staff layoff risks: risk High
of loss of human
capital
1.2. HR policy of compet- Risk of significant Staffing risks: no sig-
itors (2) labor improvements nificant risks identified
in competitor Risks of
organizations personnel use: no sig-
nificant risks identified
Staff layoff risks: risk Low
of loss of human
capital
2. Economic factors
2.1. Unemployment rate No significant risks
(2) identified
2.2. Level and rate of Risk of an increase in Staffing risks: risk of Low
change in average industry average industry forced staff reductions
wages (3) wages Risks of
personnel use: no sig-
nificant risks identified
Staff layoff risks: no
significant risks were
identified
2.3. Sanctions pressure Risk of “blacklists of Staffing risks: no sig-
from unfriendly countries media organizations” nificant risks identified
(2) Risks of Low
personnel use: risk of
losing training oppor-
tunities in hostile
countries
Staff layoff risks: no
significant risks were
identified
(continued)
Personnel Risks of Media Organizations: An Approach from the Standpoint. . . 277

Table 2 (continued)
Environmental factors External risks The degree of
affecting the personnel affecting the risk impact on
management of media personnel The impact of external the stability of a
organizations (the degree management of media risks on personnel media
of influence of the factor) organizations risks organization
3. Socio-cultural factors
3.1. Attitude towards No significant risks
work, career, leisure, and identified
retirement (1)
3.2. Public sentiment (1) Risk of protests, Staffing risks: no sig-
rallies nificant risks identified
Risks of Low
personnel use: risk of
deterioration in the
moral and psychologi-
cal climate
Staff layoff risks: no
significant risks were
identified
3.3. Population growth Risk of population Staffing risks: no sig-
rate (1) growth slowdown nificant risks identified
Risks of
personnel use: no sig-
nificant risks identified
Staff layoff risks: no
significant risks were
identified
3.4. Level of migration Risk of mass Staffing risks: no sig-
and emigration sentiment migration nificant risks identified
(2) Risks of
personnel use: no sig-
nificant risks identified
Staff layoff risks: risk Low
of loss of human
capital
3.5. Gender and age struc- Risk of a decrease in Staffing risks: no sig-
ture of the population and average life nificant risks identified
life expectancy (1) expectancy Risks of
personnel use: no sig-
nificant risks identified
Staff layoff risks: no
significant risks were
identified
3.6. Social stratification in Risk of discrimination Staffing risks: no sig-
society, increasing impor- nificant risks identified
tance of minorities (1) Risks of Low
personnel use: risk of
discrimination
(continued)
278 V. A. Plotnikov and O. A. Shamina

Table 2 (continued)
Environmental factors External risks The degree of
affecting the personnel affecting the risk impact on
management of media personnel The impact of external the stability of a
organizations (the degree management of media risks on personnel media
of influence of the factor) organizations risks organization
Staff layoff risks: no
significant risks were
identified
3.7. Situation in the labor Risk of shortage of Staffing risks: risk of Medium
market (2) narrowly specialized understaffing
specialists Risks of Medium
personnel use: risk of
labor overload
Staff layoff risks: no
significant risks were
identified
3.8. Epidemic/pandemic Risk of restrictions Staffing risks: no sig-
(2) (wearing personal nificant risks identified
protective equipment, Risks of Low
telecommuting, etc.) personnel use: risk of
decrease in labor
efficiency
Staff layoff risks: no
significant risks were
identified
4. Technological factors
4.1. Degree of develop- Risk of intensification Staffing risks: no sig-
ment of innovations and of cyber attacks nificant risks identified
technologies, Risks of Medium
cyberterrorism (2) personnel use: risk of
information leakage
due to the actions of
employees
Staff layoff risks: no
significant risks were
identified
Source: Developed by the authors based on earlier results (Plotnikov et al., 2022)

Discussion

The assessment of personnel risks should be carried out on the basis of continuous
monitoring and analysis of key indicators that make it possible to draw a conclusion
about the acceptability of personnel risks. Risk assessment is an essential component
of risk management, representing the process of measuring them in a qualitative,
quantitative, or mixed way. Risk assessment methods:
Personnel Risks of Media Organizations: An Approach from the Standpoint. . . 279

1. Calculation and analytical methods (application of mathematical methods and the

apparatus of probability theory): cost-effectiveness analysis, stochastic decision-
making models, game decision-making models, RAROC, VAR methods. Most of
the aspects related to human activity are heuristic and not always amenable to
mathematical formalization.
2. Statistical methods (allow to analyze the frequency of occurrence of a risky
situation and highlight the factors contributing to its implementation, as well as
compare data from different periods): Bayesian analysis and Bayesian network,
decision tree analysis, Monte Carlo method, Markov analysis. The disadvantage
of the methods is the need for an impressive array of data, which makes it difficult
to use them in assessing personnel risks.
3. Methods of expert assessments (based on the use of knowledge and experience of
specialists in individual or collective assessment): brainstorming, checklists, the
Delphi method, causal analysis.
4. Combined methods: risk indices, LOPA method (protection level analysis).
As the analysis showed, the following external risks had the least impact on the
sustainability of media organizations: the risk of significant labor improvements in
competing organizations, including foreign agents; the risk of an increase in the
average industry wage; the risk of blacklisting; the risk of protests, rallies; the risk of
mass migration; the risk of discrimination; the risk of restrictions: personal protec-
tive equipment.

Conclusion

The formation of new approaches to management in modern conditions is associated

with the implementation of the ideas of sustainable development and the application
of ESG principles. At the same time, the changes should spread to all areas of the
ESG agenda: Environmental, Social, Corporate Governance. Unfortunately, the
focus is usually on the Environmental and Social aspects. Aspects of Corporate
Governance are studied in the context of sustainable development more rarely. The
analysis showed that risk management methods (as a component of Corporate
Governance), developed in the theory of risk management (Fertis et al., 2012;
Masys, 2012; Vertakova et al., 2021), can and should be used in media organiza-
tions. But their specificity should be considered.
It is also necessary to consider the features of a specific functional area of
management (the article studies personnel risks). To minimize the risks of media
organizations with a high and medium degree of influence, it is recommended to use
the risk compensation method, which is a set of tools designed to prevent undesirable
situations. Attention should be paid to the timely briefing of new employees of media
organizations. This is an effective way to prevent personnel risks. As a rule, a newly
arrived employee learns about the existing risks and methods of managing them
280 V. A. Plotnikov and O. A. Shamina

either from his colleagues (the quality of such briefing is difficult to assess), or, after
a certain time, from his own experience.
We are convinced that it is expedient to streamline this process, namely, the need
to introduce standards and requirements for risk briefings. Such briefings should
become an element of effective ESG practices. At the same time, it must be
considered that even the most advanced risk management system model is not
capable of eliminating the risk. Risk and uncertainty are objectively inherent in
economic and social processes. Therefore, the likelihood of a crisis in the organiza-
tion remains even under the most favorable conditions. Therefore, it is necessary to
further develop the theory and practice of risk management, which should be an
element of the ESG approach to management.

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Analysis of the Estimation and Impact
Methodology of Tax Evasion for Industrial
Entities

Nicu Șargu , Ylia Valeeva , Angela Timus , and Evgeny Yelesin

Introduction

The realization of fiscal policy objectives is based on instruments focused on fiscal

levies, respectively financial categories, with the techniques related to the types of
taxes, fees and mandatory contributions levied on public funds. Fiscal policy is
primarily focused on taxes, duties and mandatory contributions.
A central place in fiscal policy belongs to the options regarding the structure of
the tax system and the importance of each tax, both in forming public financial
resources and in influencing economic and social life. Of major interest is the design
of the direct tax system and the indirect tax system, including the establishment of
the technical modalities by which they are to be taken over at the disposal of the
public authorities.
In the economic literature, there are different methods of calculating the tax
burden. According to the treatments presented in the specialized literature, fiscal
pressure is most often expressed as the level of fiscal revenues accumulated during a
financial year in relation to the gross domestic product, with fiscal revenues being
understood as all taxes, fees and social contributions taken from the national public
budget (Vintilă, 2006:258–261). In the works of contemporary researchers (Nuță &
Nuță, 2020), the relationship between public spending and fiscal pressure is positive,

N. Șargu
Academy of Economic Studies of Moldova, Chișinău, Republic of Moldova
Y. Valeeva (✉)
Kazan State Power Engineering University, Kazan, Russian Federation
A. Timus
National Institute for Economic Research, Chișinău, Republic of Moldova
E. Yelesin
Kazan State Institute of Culture, Kazan, Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 283
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_25
284 N. Șargu et al.

as the decision to increase the level of public spending to stimulate demand (public
or private) can be based either on tax increases, which have a direct impact on the
pressure short-term fiscal, either on an increase in the public debt with a long-term
fiscal impact.
Obviously, in the current conditions (Gabriela & Felicia, 2011), the development
of the economy is determined to a large extent by the structure of the tax system, by
the way it performs its functions and ensures the collection of public resources
(Molina-Morales et al., 2011). In this context, we mention the efforts of several
renowned scholars such as the institutionalism Roy Bluff who contributed to the
development of public policies starting from the middle of the previous century
(Johnson, 2018). At the same time, the fiscal policy is considered limited and unable
to solve certain problems at global, national or even entity level (Girón & Correa,
2021).
The fiscal policy in the current period has become the dispute of political actions,
a fact argued by the author of the article “Small Fiscal Multipliers Do Not Justify
Austerity: A Macroeconomic Accounting Analysis of Public Debt-to-GDP Dynam-
ics” (Garbellini, 2016), in which the author debates a dilemma concerning the
establishment of multipliers depending on the nominal budget value. Researchers
are increasingly concerned with the effects of fiscal budget policy and the factors that
would stimulate the removal of fiscal pressure on economic units. In this context, we
present the argument of the study developed by the researchers from China whose
research reached the conclusion: “The results show that the reduction of the aggre-
gate tax has a positive effect on real variables such as production and consumption;
especially at the current stage, the stimulating effect of general tax cuts on economic
growth is relatively strong, but the stimulating effect on prices is relatively weak. In
addition, a tax structure in which the ratio of direct tax to total tax increases and the
ratio of indirect tax to total tax decreases is more favorable to the growth of
production and consumption and will not strongly stimulate the rise of the price
level (Li et al., 2022).
Another study carried out by a group of researchers from the EU states demon-
strated that it is important to be able to manage the domestic fiscal policy to avoid
more risks. Thus the study demonstrated that “over the years, during the worst crises,
only a few economies have managed to maintain high levels of inclusive growth
through properly implemented monetary, fiscal and governance policies.”
These were: Denmark, Luxembourg, Sweden and Finland, the countries that follow
restrictive fiscal policies to stimulate economic growth » (Stawska & Jabłońska,
2022) Obviously, fiscal policy represents one of the state’s jokers, and their correct
management, obviously, implies well-being and performance.
The authors’ concerns, however, are to identify the role of the fiscal pressure
formed by the state’s fiscal policies on the performance of economic entities.
Macroeconomic processes are directly dependent on elements, mechanisms and
microeconomic circuits. Entities are the main suppliers of the budget, and their
financial performance can be directly proportional to tax collection. Thus, the aim
of the study is a theoretical-methodological substantiation focused on the indicator
of fiscal pressure felt by the taxpayer.
Analysis of the Estimation and Impact Methodology of Tax Evasion. . . 285

Materials and Methods

The mathematical expression of fiscal pressure is given by the formula:

Vf
FPg = × 100% ð1Þ
GDP

Where:
FPg—fiscal pressure (or global taxation rate);
Vf—the totality of fiscal revenues, respectively the totality of receipts made in a
year from taxes, fees and contributions;
GDP—gross domestic product.
By means of the fiscal pressure, the state exercises its financial, economic and
social role. At the same time, expressing this function, it must be taken into account
that the fiscal pressure also expresses the yield of the collection system. Or, the fiscal
pressure designates the part of income from production, which instead of being left
at the disposal of free private initiative, goes through a process of compulsory and
public redistribution. From the point of view of tax evasion, this understanding is
important (Vintilă, 2006:235). The basic principle is that “ensuring the collection of
taxes with a minimum of expenses and to be the least burdensome for the payers”
(Vintilă, 2006:238).
Noting that tax evasion can occur at the level of the taxpayer, it is essential to
determine what the tax pressure is at the level of entity and physical person, in order
to grasp the generally accepted level of taxation. In economic theory, the relationship
established between the flow of fiscal receipts (tax revenues) and the taxation rate is
shown through the Laffer Curve.
The basic idea behind this Laffer curve was that changes in the tax rate can
generate effects on tax revenue. These effects are (Trandafir & Brezeanu, 2011:1):
– the arithmetic effect, which provides that when the taxation rate is decreasing, the
tax revenues, which are expressed per taxable income unit, will decrease, and
conversely, if the taxation rate increases, it will influence the increase in tax
revenues;
– the economic effect, it acts in the opposite way to the arithmetic one, thus the
decrease in the tax rate of labor and production, i.e. of the tax base, will have a
beneficial effect on the economy because participation in taxable activities will be
rewarded by a lower tax, and the increase in the tax rate will have the effect of
penalizing the participation in taxable activities.
286 N. Șargu et al.

Results and Discussion

Fiscal pressure represents the monetary amount of the fiscal obligation borne by the
income at the individual (entity), sectorial, global (national economy level). The
benchmarks used to determine the fiscal pressure in terms of flow are as follows:
Individual tax pressure.
Individual Tax Pressure The main way through which fiscal pressure is
manifested at the level of the entity is the profit tax, since profit remains the main
element of self-financing. The higher the profit tax rate, the less self-financing
capacity (Dinga, 2008). In the Romanian literature, three methods are proposed for
estimating the level of fiscal pressure at the entity level.
1. The first and simplest method of estimating the fiscal pressure is to compare the
tax quotas established by legislation for certain economic branches, at certain
periods of time. For example, comparing the rates of income tax, obtained from
the activity of an entrepreneur, in the R.M. would be: 32% (1998), 28%
(1999–2001), 25% (2002), 22% (2003), 20% (2004), 18% (2005), 15%
(2006–2007), 0% (2008–2011), 12% (2012–2020). (Corina, 2019:34–35). The
fiscal pressure can increase not only by increasing the rates, but also by increasing
the taxable base, limiting some expenses, etc.
2. The second method consists in determining the fiscal pressure according to the
following formula (Corina, 2019:69):

It
FPI = × 100 ð2Þ
VPI

Where:
FPI—individual fiscal pressure (at entity, company level);
It—taxes and fees paid by the company;
VPI—Total value of the firm/Equity of the firm
This method of analysis is significant at the microeconomic level and is most
often used by the entities of the Republic of Moldova. The indicator reflects the fiscal
pressure felt by taxpayers—legal entities active in different fields. This indicator is
also one of the most important for the economy, because the economic agents are the
ones who form the gross domestic product, a macro-economic indicator of national
and international importance, used to make comparisons between states. In general,
research shows that the taxpayer considers the tax burden to be fair up to 30%, it is
difficult to perceive the tax burden of 40%, and it is not accepted when it
exceeds 50%.
Similarly, in such an approach, the fiscal pressure can also be calculated by the
following indicator
Analysis of the Estimation and Impact Methodology of Tax Evasion. . . 287

It
FPI = × 100% ð3Þ
Vprod

Where,
FPI—individual fiscal pressure (at entity, company level);
It—taxes and fees paid by the company;
Vprod—the value of the production/services produced by the entity during one
year
3. The third method of estimating the tax pressure will be calculated according to
the formula:

It
FPI = × 100% ð4Þ
VV

Where,
FPI—individual fiscal pressure (at entity, company level);
It—taxes and fees paid by the company;
VV—the volume of sales or turnover
The sectorial fiscal pressure in terms of flow can be analyzed on the basis of
three indicators:

b) The flow of direct c) The flow of indirect

a) The flow of direct collections from the household withdrawals on final
collections from the sector sector consumption
which is determined which reflects the amount of which refers to the amount of
separately for: the fiscal obligations levied the fiscal obligation collected
non-financial company and directly on the incomes made indirectly through prices and
quasi-company sector, the by individuals and which tariffs (the income used as
credit institutions sector, the directly influences the dispos- final consumption,
insurance institutions sector; able income of the population, redistributed through indirect
household sector; the public intended for consumption and fiscal levies).
administration sector; sector saving.
that targets abroad.

The flow of fiscal levies can be analyzed: at the level of the administration (for all
administrations); by groups of taxes (total taxes); on types of taxes. All these
indicators in terms of flow, reflect the part of the income achieved, accumulated
and consumed in society, which is taken over by means of various tax levies to
finance budgetary institutions.
Global Fiscal Pressure in Terms of Flow, at a Country Level Currently, many
countries, including the Republic of Moldova, when estimating the fiscal pressure at
the macroeconomic level, use the method of calculating the net fiscal pressure,
which allows providing the fiscal image from an accounting point of view (Corina,
2019:73, 79):
288 N. Șargu et al.

I. General fiscal pressure

I þ CAS þ CAM
FP =  100% ð5Þ
GDP

Where,
FP is the fiscal pressure;
I—the total amount of taxes and fees;
CAM—medical insurance contributions;
CAS—social security contributions;
GDP—Gross Domestic Product
II. Absolute fiscal pressure:

I
FP = × 100% ð6Þ
GDP

Where,
FP is the fiscal pressure;
I—the total amount of taxes and fees;
GDP—Gross Domestic Product
III. Fiscal pressure of a tax or charge

Ij
FPj = × 100% ð7Þ
GDP
Ij
FPj = × 100% ð8Þ
I
Ij
FPj = × 100% ð9Þ
B tax

Where,
FPj is the fiscal pressure of a tax or fee j considered;
Ij—the considered tax or charge;
Btax—considered taxable or chargeable base;
IV. The fiscal pressure at the level of the national economy can be expressed as
follows:

n
I j ðFSÞ
j=1
FP = × 100% ð10Þ
VV
Analysis of the Estimation and Impact Methodology of Tax Evasion. . . 289

n
Ij
j=1
FP = × 100% ð11Þ
VV
Ij
FP = × 100% ð12Þ
VV

Where,
VV—is the sales revenue
Ij—the considered tax or charge;
FS—the planned services budget
These methods of calculating the fiscal pressure do not allow comparing the
results obtained by economic agents from different branches of the national econ-
omy. On the contrary, their application favors the analysis of the evolution of the
level of fiscal pressure from a macroeconomic point of view.
Fiscal burden is an indicator to be applied with caution, as the calculation does not
provide information regarding the management of fiscal burden. Thus, tax exemp-
tions, subsidies granted and other forms of encouragement of entrepreneurial activity
are not taken into account in its calculation. As a result, the estimation of the fiscal
pressure is relevant, only in the case of a more complex analysis of the influence of
taxation on the taxpayer and, respectively, in the case of estimating the causes of tax
evasion, the pressure must be seen as causality and not a certainty.
An important significance for reducing tax evasion is at the entity level. In this
context, the authors have carried out a study through which they theoretically
substantiate the statement: the performance of the financial position dependent on
the effect of tax evasion. Taxation (Cobzari & Şargu, 2021) is a reality of today’s
economic life, the economic and financial performance of companies being
influenced by its action. Under the conditions of a fiscal system that respects the
principle of neutrality of fiscal measures in relation to different categories of
investors and capitals, with the form of ownership, a fiscal system that ensures
equal conditions for investors, the influence of taxation on the economic and
financial performance of companies must, at least theoretically, have the same effect
on all the economic agents.
In other words, taxation should not be a factor that can create an advantage or
disadvantage for a company compared to another company. However, the creation
of a fiscal system that fully respects the principle of neutrality of fiscal measures is
only a wishful thinking. Also, even if this desired is ensured, the economic agents do
not act identically in terms of the decisions taken in the conduct of economic
activities and hence differences may arise in terms of the taxation action on compa-
nies (even in the case of companies that carry out similar activities and register the
same activity level).
At the microeconomic level, the impact of tax evasion can be found in the
modification of the aspects of the organization regarding the financial position,
financial performance and cash flows (Raita, 2020:78).
290 N. Șargu et al.

1. With Regard to the Financial Position The financial position of the organiza-
tion is derived from the balance sheet, being expressed by the answer to the three
fundamental questions:
– what the organization has: assets;
– what the organization owes: liabilities;
– who owns the property right: the organization’s capital, owned by the share-
holders (stockholders’ equity).
Tax evasion will reduce the company’s debts (debts to the state, i.e. budget obliga-
tions), therefore, a first effect of tax evasion on the company’s financial position will
be the increase in the net situation (Dinga, 2008).
The net position without fiscal evasion (SN) is determined as follows:

SN = A - D ð13Þ

where:
A—the company’s assets
D—the actual debts of the company
If we note the tax evasion “achieved” by the organization with EF, then the
following relationship can be written:

SNEF = A - DEF = A - ðD- EFÞ = SN þ EF ð14Þ

Where:
EF—tax evasion
SNEF—the net situation after the occurrence of tax evasion,
DEF—the debts of the organization after the occurrence of tax evasion.
Therefore, the net situation after tax evasion occurs will increase by exactly the
absolute value of tax evasion produced. If we denote by λ—the coefficient that
expresses the weight of tax evasion in the total real debt of the organization, then the
above relationship becomes:

SNEF = A - DEF = A - Dð1- λÞ ð15Þ

Where:
EF—tax evasion
SNEF—the net situation after the occurrence of tax evasion
DEF—the debts of the organization after the occurrence of tax evasion
A—the company’s assets
D—the actual debts of the company
0 ≤ λ ≤1.
As the net position reflects the net wealth of the organization’s shareholders, it
follows that the shareholders become richer proportionally to the tax evasion
produced at the level of the organization in question. It is therefore an obvious and
massive improvement of the financial position of the organization, likely to attract
Analysis of the Estimation and Impact Methodology of Tax Evasion. . . 291

new investors, thus providing it with additional chances of prosperity. Obviously,

the increase in the net situation will lead, in the following periods, to the increase in
the net assets of the organization, leading, through a “virtuous circle”, to the growth
and consolidation of the organization. This can happen by increasing the self-
financing capacity of the investments at the organization level.
In addition, the organization can use the net situation surplus to increase its
permanent sources of financing the current activity (first of all, the exploitation
activity), so it can increase its working capital, an aspect with a beneficial effect
on ensuring the financing of the activity exploitation of the organization.
2. On Financial Performance The organization’s financial performance (Ignat
et al., 2020) can be seen from its profit and loss account. Since tax evasion is
obtained, in principle, by reducing the tax base observable by the tax inspector, it
follows that tax evasion will “display” a lower gross profit of the organization.
Therefore, from an official point of view, the organization will register a lower
economic and financial yield, that is, a lower performance.
The main effects of tax evasion on the organization’s real performance.
– following the practice of fiscal evasion, the organization will benefit from an
additional monetary supply; this means that the organization will be able to self-
finance (either to cover the needs of temporary sources, or even for investments);
one of the effects will be that the organization will avoid the costs of external
financing (especially indirect financing, that is, from the banking system); this
saving on the costs of financing the activity will increase the gross profit in the
subsequent financial year; this effect is likely to increase, in reality, the perfor-
mance of the organization, of course, based on the social effort of the whole
society;
– tax evasion works, therefore, as a monetary substitute, able to provide all the
functions of a monetary injection of any kind (bank credit, bond issue, asset sales,
buybacks of state securities held by the organization, etc.), in this context, the
company’s financial performance will increase, although this increase may prove
uncertain and, certainly, it is an unsustainable increase in performance;
– the effect of tax evasion on performance should be seen in the medium and long
term and not just in the short term. It is about the fact that the tax evasion
produced can be discovered in subsequent periods.
In fact, the identification of tax evasion is the one that actually reduces the perfor-
mance of the organization, (Ignat & Șargu, 2022) so it can be said that, in fact, tax
evasion has the definite effect of reducing performance.
If we denote by EFt—the absolute size of tax evasion produced by an organiza-
tion, at time t (this represents, in fact, the debit to be discovered by the inspector at
time t + Δt), the penalty related to the period when the government did not benefit of
the amount evaded but, instead, the organization that produced the tax evasion
benefited from this amount will be PΔt.
The penalty consists of the interest related to the amount and the period during
which the tax evasion was not identified, plus the legal fines, plus certain
292 N. Șargu et al.

confiscations, if applicable. If we note the rate of interest penalty with φ, the

contravention fine with A, and the confiscation with C, it follows that the penalty
will be calculated as:

PΔt = φ × FF t × Δt þ A þ CEF ð16Þ

On this basis, a tax evasion multiplier μEF, calculated as follows, can be determined

EF t þ PΔt
μEF = >1 ð17Þ
EF t

Therefore, if tax evasion is discovered and sanctioned, it reduces the financial

performance of the organization concerned.
3. With Regard to Cash Flows (Turnover or Cash Flow) The organization’s cash
flows are obtained from its cash flow statement. The tax evasion produced at the
level of the organization is reflected in the treasury flows of the organization,
therefore the following effects can be affirmed:
– tax evasion represents, from the perspective of the organization (regardless of its
illegal character), an amount attracted, that is, a financial resource that increases
the possibility of financing the organization, therefore, we have an increase in this
category of financial (monetary) flow;
– at the same time, tax evasion represents, from the perspective of the government
inspector, an increase in the state’s claims on the organization, although, from a
legal point of view, the organization should have paid the evaded monetary
amount to the state, in reality it retains this amount, therefore, from the perspec-
tive of the organization, there is no change in the financial flows with the state
because, if it is a “serious” evasion, the budgetary obligation corresponding to
this evasion does not appear calculated and recorded anywhere in the organiza-
tion’s accounting;
– in case of discovery of evasion, the treasury will be the organization will be
sanctioned, the treasury flows being reduced by the sum of the unpaid tax and the
calculated penalties, therefore, we have an essential decrease of the financial
(monetary) flow.
Tax evasion is a sensitive topic, especially at tax time. Opposition in tax compliance
can often be accepted at management level to strengthen the financial position of the
entity. At the same time, this approach includes a multitude of risks, both financial
and accounting, but also image. Non-compliance not only alerts the tax inspectors, in
the case of subsequent controls, but will also reduce the entity’s position on the
market and in the activity segment; it may lose its relations in the framework of
public procurement, etc.
Taxation is a reality of the current economic life, the economic and financial
performances of companies being influenced by its action. Under the conditions of a
fiscal system that respects the principle of neutrality of fiscal measures in relation to
Analysis of the Estimation and Impact Methodology of Tax Evasion. . . 293

different categories of investors and capitals, with the form of ownership, a fiscal
system that ensures equal conditions for investors, the influence of taxation on the
economic and financial performance of companies must, at least theoretically, have
the same effect on all the economic agents.
In other words, taxation should not be a factor that can create an advantage or
disadvantage for a company compared to another company. However, the creation
of a fiscal system that fully respects the principle of neutrality of fiscal measures is
only a wishful thinking. Also, even if this desired is ensured, the economic agents do
not act identically in terms of the decisions taken in the conduct of economic
activities and hence differences may arise in terms of the taxation action on compa-
nies (even in the case of companies that carry out similar activities and register the
same activity level).

Conclusion

Fiscal evasion, in a general approach, represents the evasion by any means, in whole
or in part, from the payment of taxes, fees and other amounts due to the state budget,
local budgets, the state social insurance budget and the mandatory health insurance
funds by individuals and legal entities.
Tax evasion is the way in which economic subjects respond to fiscal pressure,
when it exceeds a certain threshold considered necessary for the initiation, mainte-
nance and development of the business or any profitable activity, as well as in
relation to their current assets or income. The most frequent and simplest form of
exposure of tax evasion is the definition that exposes the evasion of taxes and fees of
the acquired income and assets that are subject to tax taxation.
In a global approach, tax evasion represents the point of the underground
economy which, in interaction and interdependence with the other specific compo-
nents of economic-financial crime, renders the true amplitude of the informal level of
the economy.
Studying the methodology for measuring tax evasion and the effects borne by the
entity/economic agents allows us to find:
– In economic theory and practice, there are several methods of estimating tax
evasion, these being dependent on the area of analysis (at the entity, branch,
underground economy or tax havens level);
– The main effects of tax evasion on the entity/organization’s performance
would be:
following the practice of tax evasion, the organization will, in the short term,
benefit from an additional monetary supply; this means that the organization
will be able to self-finance (either to cover the needs of temporary sources or
even for investments); one of the effects will be to avoid external financing
costs (especially indirect financing, i.e. from the banking system); this saving
on the costs of financing the activity will increase the gross profit in the
294 N. Șargu et al.

following financial year; this effect is likely to increase, in reality, the perfor-
mance of the organization, of course, based on the social effort of the whole
society;
the effect of fiscal evasion on performance must be seen in the medium and long
term and not only in the short term. It is about the fact that the tax evasion
produced can be discovered in subsequent periods. This would mean double
costs, through the payment of taxes that had to be made in the subsequent
period and the penalties/fines incurred. In fact, the identification of tax evasion
is the one that actually reduces the financial results of the organization, so it
can be said that, in fact, tax evasion has a certain effect of reducing perfor-
mance;Harmful fiscal conduct has social effects—tarnishing the image of the
organization/entity with all the consequences that may follow: the entity may be
omitted from the register of public procurements; it will be more difficult to
obtain bank loans and financing from shareholders (especially minority) and on
the capital market; more rigorous monitoring by the tax authorities, as a result of
the compromised fiscal reputation, a fact that reduces the useful time of the
accountant and creates additional deficiencies in the economic activity, etc.

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Selection of Methods for Assessing
the Resultativeness of the Company’s
Adaptation to Market Conditions

Natalia Meshkova , Julia Stepanova , and Svetlana Kudinova

Introduction

The modern operating environment of industrial enterprises is characterized by a

high degree of variability and a low threshold of predictability of upcoming events.
First of all, this is due to global changes in the economic and political life of society,
the irreversibility of digitalization of business processes of industrial enterprises. In
such conditions, one of the best ways to ensure the economic security of an industrial
enterprise is effective adaptation to changes occurring in the external environment,
including market conditions. In order to ensure the resultativeness of adaptation in
the long term, it is necessary to constantly evaluate the resultativeness of adaptation.
This will help to identify negative trends in the course of the adaptation process, to
level them in time. Continuous assessment of the resultativeness of adaptation will
allow to form an information base for making timely and high-quality decisions on
the adaptation of industrial enterprises to market conditions.
The works reveal the main environmental challenges that modern industrial
enterprises have to adapt to Zhigir (2019) and Bauer et al. (2018). Analyzing the
research of scientists, we can note a fairly large number of works on evaluating the
performance of enterprises using a variety of evaluation methods (Bucherer et al.,
2012; Kozhevina et al., 2019). At the same time, the choice of methods for assessing

N. Meshkova (✉)
National Research Moscow State University of Civil Engineering (NRU MGSU), Moscow,
Russian Federation
e-mail: [email protected]
J. Stepanova
Lugansk Vladimir Dahl State University, Lugansk, Russian Federation
S. Kudinova
Gzhel State University, Electroizolyator, Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 297
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_26
298 N. Meshkova et al.

the resultativeness of adaptation has not been practically investigated and requires
additional study. In this regard, the purpose of the study is to develop recommen-
dations on the choice of methods for assessing the resultativeness of adaptation of
industrial enterprises to market conditions.

Materials and Methods

The material was the results of research by foreign and domestic scientists,
the authors’ own scientific developments (Sidorenko & Khisamova, 2020). To
solve the problem of quantitative measurement of the resultativeness of the adapta-
tion of the enterprise to the influence of the market subject, general scientific
methods were used: collection, generalization and systematization of information,
the method of analysis and synthesis, comparative analysis (Pimenova, 2021). The
task of generalizing the calculated values of the resultativeness of adaptation to the
influence of market participants is proposed to be solved using methods of economic
analysis. The integral and graphical methods selected by comparative analysis are
recommended for use (Saucedo-Martínez et al., 2018). To solve the problem of
analyzing the stochastic dependencies of the components of the resultativeness of
adaptation to the influence of market participants on the costs of adaptation, the
following can be used: correlation, regression and variance analyses. Using the
method of comparative analysis, it is recommended to use multivariate correlation
and regression analysis. Linear programming, quasi-Newtonian methods, the
Nelder-Meade method, Monte Carlo methods, etc. can be used to solve the problem
of optimizing the adaptation efficiency indicator. Due to the use of comparative
analysis, it is recommended to use the Nelder-Meade method. The use of the above
methods allowed the authors to give recommendations on assessing the
resultativeness of adaptation of an industrial enterprise to market conditions
(Kuntzman, 2017; Sneps-Sneppe et al., 2017).

Results

In order to form a list of methods suitable for assessing and optimizing the
resultativeness of adaptation, it is necessary to decompose the main task into
components:
1. quantitative measurement of the resultativeness of an enterprise’s adaptation to
the influence of a particular market entity (suppliers, consumers, competitors);
2. generalization of calculated values of the resultativeness of adaptation to the
influence of suppliers, consumers and competitors;
Selection of Methods for Assessing the Resultativeness of the Company’s. . . 299

3. analysis of stochastic dependencies of the components of the resultativeness of

adaptation to the influence of market entities on the costs of adaptation;
4. optimization of the adaptation efficiency indicator and its costs.
To solve the first problem, the author’s algorithm for assessing the resultativeness of
adaptation is proposed (Khusnutdinov et al., 2020), based on the calculation of
the parameters of the result of adaptation to market conditions (parametric method).
The reason was the lack of methods and models for assessing the resultativeness of
the adaptation of an industrial enterprise to market conditions. The proof of this
statement can be the conclusions from the analysis of Tables 1 and 2, in which it is
proposed to classify the existing models and methods of performance evaluation by
the object of evaluation and analyze them for the possibility of applying them to
measuring the resultativeness of an enterprise’s adaptation to the influence of market
entities.
Analyzing Table 1, it can be concluded that the use of methods and models
developed to assess the resultativeness of an enterprise’s adaptation to market
conditions for assessing the resultativeness of the enterprise as a whole is of little
use. Analyzing Table 1, it can be concluded that the use of methods and models
developed to assess the resultativeness of an enterprise’s adaptation to market
conditions for assessing the resultativeness of the enterprise as a whole is of little
use. The resultativeness of the company’s adaptation to market conditions certainly
affects the resultativeness of the company’s activities, however, it is only one of
the criteria characterizing the resultativeness of the activity. Therefore, to solve the
problem of quantifying the resultativeness of an enterprise’s adaptation to the
influence of a separate market entity, only individual ideas and indicators can be
used to assess the results of adaptation. The resultativeness of the company’s
adaptation to market conditions certainly affects the resultativeness of the company’s
activities, however, it is only one of the criteria characterizing the resultativeness of
the activity. Therefore, to solve the problem of quantifying the resultativeness of an
enterprise’s adaptation to the influence of a separate market entity, only individual
ideas and indicators can be used to assess the results of adaptation.
Let’s consider how applicable the methods and models developed to assess the
resultativeness of individual economic processes in Table 2 are for quantifying the
resultativeness of an enterprise’s adaptation to market conditions.
Adaptation is one of the processes of the company’s activity, therefore, most of
the ones discussed in Table 2 methods and models are generally applicable to
quantify the resultativeness of adaptation, but in each case a serious correction is
required, taking into account the peculiarities of the adaptation process, the result
and resultativeness of the adaptation of an industrial enterprise to market conditions.
Analysis of the Tables 1 and 2 showed that to date there is no ready-made
methodology or model that could be used to assess the resultativeness of an
enterprise’s adaptation to the influence of market participants. Analyzing the expe-
rience of scientists who have developed methods and models for assessing the
performance of an enterprise, its individual divisions or business processes, it can
be concluded that for quantitative measurement of the resultativeness of adaptation,
300 N. Meshkova et al.

Table 1 Methods and models developed to assess the performance of the enterprise
Applicability for assessing the
Method or model, author The essence of the method resultativeness of adaptation
Management method by goals Clear work goals and objec- It is possible to use SMART
Management by Objectives tives are established that must criteria to establish the
MBO P. Drucker meet the SMART criteria planned results of adaptation
(concreteness, measurability,
reality, result orientation, cer-
tainty in time)
The pyramid of performance. The model is based on a set of It is possible to apply separate
Five-component cycle-the financial and non-financial indicators for the blocks mar-
process of R. Lynch, K. Cross, indicators divided into ket, customer satisfaction,
McNair 9 blocks (market, finance, cus- supply time, production cycle
tomer satisfaction, innovation
and training, productivity,
quality, supply time, produc-
tion cycle, losses (marriage)).
The performance pyramid
allows you to manage perfor-
mance at the level of a com-
pany or a separate
business unit.
The resultatives management It is based on the idea of a It is possible to implement a
technology BPM (Business continuous management cycle. continuous cycle of adapta-
Performance Management) The resultatives management tion process management
system traditionally operates
with four groups of
indicators—financial, account-
ing (expenditure), market and
management.
Model “Tableau de bord” It is a set of financial and It can be used to build a sys-
(“On-board scoreboard”) non-financial indicators to tem of indicators for assessing
measure the performance of the results of adaptation, as
each division. Indicators in the well as tracking the values of
system are divided into target these indicators
and functional. The main part
of the indicators is monitored
online (daily)
Balanced Scorecard (BSC) The task of the system is to Partial use is possible to build
methodology translate the company’s strat- a system of indicators for
R. Kaplan, D. Norton egy into a comprehensive set assessing the results of
of monetary and non-monetary adaptation
indicators for intra-company
management purposes that
determine the main parameters
of the measurement and man-
agement system.
АМВІТЕ (Advanced Each of the business process It is possible to apply the idea
Manufacturing Business cycles and the basic compo- of highlighting strategically
Implementation Tool for nents are revealed in the important indicators of the
AMBIT model by the system resultativeness of the
(continued)
Selection of Methods for Assessing the Resultativeness of the Company’s. . . 301

Table 1 (continued)
Applicability for assessing the
Method or model, author The essence of the method resultativeness of adaptation
Europe) according to five analytical company’s adaptation to mar-
P. Bradley indicators. It is proposed to use ket conditions
25 strategically important
management resultativeness
indicators for different types of
production activities.
ENAPS Three hierarchical levels of It is possible to use the idea of
International methodology indicators are used to assess hierarchical levels, which will
the resultativeness of eco- make it possible to identify
nomic activity of companies. the internal reasons for the
At each level, all performance decrease in the resultativeness
indicators are defined in the of adaptation
context of eight groups:
Accounting, product develop-
ment, marketing and sales,
planning and production, cus-
tomer service, procurement,
personnel and other indicators.
V-model The model is based on the let- The use of this model is rather
Bruce Aaron ter of the Latin alphabet “V”. narrow (ROI estimation) and
The left side stands for analysis controversial, therefore, the
and development. The left side V-model is of little use for
stands for analysis and devel- assessing the resultativeness
opment. At the junction point of adaptation
of the left and right halves,
there is a “total efficiency”. At
the junction point of the left
and right halves, there is a
“total efficiency”. At the junc-
tion point of the left and right
halves, there is a “total effi-
ciency”. The right side of the
letter denotes measurement
and evaluation. This model
provides a symbiosis of analy-
sis and development, mea-
surement and evaluation
EP2M Model Effective Pro- Performance and growth The use is impractical, since
gress and Performance Mea- assessment. It is carried out in the model is used to assess the
surement four directions: customer ser- performance of the enterprise
K. Adams vice and markets; improve- as a whole
P. Roberts ment of internal processes;
change management and strat-
egy; ownership and freedom of
action
The method of evaluation by Identifies the following The application is impractical,
results (performance) D. Sinc criteria: efficiency, efficiency, since the method evaluates the
quality, profitability, resultativeness of the
(continued)
302 N. Meshkova et al.

Table 1 (continued)
Applicability for assessing the
Method or model, author The essence of the method resultativeness of adaptation
productivity, working condi- enterprise as a whole. For the
tions, innovation. When eval- purpose of our study, it is
uating the results, the interesting to evaluate the
following are determined: the resultativeness of the adapta-
significance and specific tion process only
weight of each criterion; the
criterion meter; the relation-
ship of the measurement sys-
tem with increased
productivity

it is impossible to do without the parameters of the adaptation result based on the

performance of the enterprise.
The task of generalizing the calculated values of the resultativeness of adaptation
to the influence of suppliers, consumers and competitors can be solved using
methods of economic analysis. Let’s consider the following criteria for choosing a
suitable method, taking into account the fact that the generalizing indicator of the
resultativeness of adaptation is quantitative: objectivity, user perception, the ability
to analyze the data obtained, the ability to see the overall picture of the results, the
visibility of the method, the independence of the method. Using the selected criteria,
we will choose the method most suitable for generalizing the calculated values of the
resultativeness of adaptation of an industrial enterprise to the influence of suppliers,
consumers and competitors (Table 3).
As can be seen from the analysis of Table 3, the graphical method has received
the greatest number of advantages, but it cannot act as an independent method. The
method of expert assessments scored the least number of points, besides, it does not
meet one of the main criteria for quantitative measurement—objectivity. The graph-
ical and integral methods scored the same number of points. The disadvantages of
one of the two methods overlap with the advantages of the other. Considering the
data of Table 2 it can be argued that it is advisable to use the graphical method as an
addition to the integral method.
The next task of assessing the resultativeness of adaptation is to analyze the
stochastic dependencies that make up the resultativeness of adaptation to the influ-
ence of market participants on the costs of adaptation. The following methods are
suitable for solving this problem: correlation, regression and variance analysis. We
will form criteria that the chosen method should meet: simplicity of perception of the
method; absence or ease of preparatory work; availability and volume of the
information base; independence from the professionalism of the performer; a range
of tasks that can be solved with the help of the method; taking into account the
probabilistic (stochastic) relationship between the influencing factor and the final
indicator; study of the influence of a particular the number of factors on the final
indicator; establishing the level of influence of the factor on the function; the ability
Selection of Methods for Assessing the Resultativeness of the Company’s. . . 303

Table 2 Methods and models developed to assess the resultativeness of individual economic
processes
Applicability for assessing the
Method or model, author The essence of the method resultativeness of adaptation
A three-dimensional model for Resultativeness is determined Designed to evaluate the
determining the resultativeness on the basis of the following resultativeness of the enter-
of economic processes, concepts: efficiency; cost- prise management system. It
E. Moseng and P. Brida p effectiveness; flexibility. The is possible to use methodo-
main methodological tools for logical tools: self-audit,
ensuring the resultativeness of in-depth diagnostics of
this model are: organization activities
audit, in-depth diagnostics of
activity, self-assessment and
implementation of its results,
benchmarking
Ternary information-centered To quantify the result of the When assessing the
resultativeness assessment economic process, it is neces- resultativeness of adaptation,
model sary to determine its parame- it is advisable to take into
O.I. Oleksiuk ters in the barycentric system account the main logical ele-
“information—resource— ments of this model, since
Time”. It is based on logical they significantly affect the
elements: Result, time, infor- resultativeness of an enter-
mation and resources, through prise’s adaptation to market
which the resultativeness of conditions
economic processes is
determined
The method of the main crite- When determining the The use is possible, but the
rion resultativeness criterion, the question arises about the
V.M. Lugovaya method of the main criterion objectivity of establishing the
was used, which does not main criterion for the
require the construction of an resultativeness of adaptation
aggregation function based on and the accuracy of restric-
partial criteria. Aggregation is tions on other criteria.
reduced to assigning one of the
criteria (Kj) as the main one,
and the remaining criteria must
satisfy additional restrictions
Matrix method of MMR allows you to bring It is possible to use the idea of
resultativeness evaluation together—Integrate and MMR, correction is necessary
(MMR). D.A. Osadchaya aggregate partial indicators in for use in assessing the
such a way that the results of resultativeness of adaptation
the work are measured by a
single number
The precedent model of A precedent expert system is It can be used to evaluate
resultativeness used for personnel certifica- non-qualitative indicators, it
tion. Reflects the dependence is necessary to have profes-
of labor resultative on the sional experts
competence and motivation of
the staff
304 N. Meshkova et al.

Table 3 Selection of a method for generalizing the calculated values of the of adaptation to the
influence of suppliers, consumers and competitors
Methods Methods of
Methods of developing Integral Graphical expert
Criteria a system of indicators method method assessments
Objectivity + + – –
User perception – + + –
The ability to analyze the + – + +
received data
The ability to see the overall – + + –
picture of resultativeness
Method visibility – + + –
Independence of the – – – +
method
Total benefits 2 4 4 2

to analyze the impact on the final function of several factors; cost-effectiveness. The
criteria are formed on the basis of an analysis of the essence, disadvantages and
advantages of economic analysis methods and generally accepted requirements that
each scientific method must meet.
To solve the problem of finding stochastic dependencies between indicators, the
following methods are most often used: modern multidimensional factor analysis,
methods of deterministic factor analysis, multidimensional correlation and regres-
sion analysis, variance analysis, sensitivity analysis. In Table 4, we will analyze
these methods in accordance with the selected criteria of their suitability for solving
the task.
Based on the results of the total number of advantages of the selected methods
(Table 4) when conducting a study, you need to pay attention to multi-factor
correlation and regression analysis (7 points), methods of deterministic factor anal-
ysis (6 points) and variance analysis (6 points). Correlation and regression analysis
scored the highest number of points, so it is recommended to use it to analyze the
dependencies of the components of the effectiveness of adaptation on the costs of it.
Let’s choose a method for optimizing the indicator of the effectiveness of
adaptation and its costs in Table 5 (suitable methods for use: linear programming,
quasi-Newtonian methods, the Nelder-Meade method, Monte Carlo methods, etc.).
As can be seen from the analysis of Table 5, the Nelder-Meade method is the most
suitable for optimizing the adaptation performance indicator and its costs, which
ensures search accuracy with a sufficiently high convergence rate and a small use of
computing resources, insensitivity to interference, since gradients are not used in this
method.
Selection of Methods for Assessing the Resultativeness of the Company’s. . . 305

Table 4 Selection of a method for analyzing stochastic dependencies of components of adaptation

resultativeness on adaptation costs
Methods Multivariate
Methods of correlation
Modern deterministic and Analysis
multidimensional factor regression of Sensitivity
Criteria factor analysis analysis analysis variance analysis
Ease of percep- – + + – +
tion of the
method
Absence or ease – + – – +
of preparatory
work
Availability and – + + + +
volume of the
information base
Independence – + – – –
from the profes-
sionalism of the
performer
The breadth of + – + + –
the spectrum of
tasks that can be
solved using the
method
Taking into + – + + –
account the
probabilistic
(stochastic) rela-
tionship between
the influencing
factor and the
final indicator
Investigation of – – + + –
the influence of a
specific number
of factors on the
final indicator
Establishing the + + + + +
level of influence
of the factor on
the function
The ability to + – + + –
analyze the
impact of several
factors on the
final function
Economy (time, – + – – +
money)
Total benefits 4 6 7 6 4
306 N. Meshkova et al.

Table 5 Selection of a method for optimizing the adaptation resultativeness indicator and its costs
Methods Quasi— The Nelder- Monte
Linear Newtonian Meade Carlo
Criteria programming methods method Methods
Search accuracy – + + +
Availability and volume of the + + + +
information base
The breadth of the spectrum of tasks – – + +
that can be solved using the method
The number of calculation func- – – + –
tions per iteration
The effect of interference on the – – + –
calculation results
Convergence (reliability) + + – +
Convergence rate – – + +
Economy (time, money) + + + –
Total benefits 3 4 7 5

Table 6 Methods recommended for a comprehensive assessment and optimization of the

resultativeness of an enterprise’s adaptation to the influence of market subjects
The task of assessing the resultativeness of adaptation Methods suitable for
evaluation
Quantitative measurement of the resultativeness of adaptation of an Parametric method
industrial enterprise to market conditions
Generalization of calculated values of the resultativeness of adaptation Integral method, graphi-
to the influence of suppliers, consumers and competitors cal method
Analysis of stochastic dependencies of the components of the Correlation and regres-
resultativeness of adaptation to the influence of market entities on the sion analysis
costs of adaptation
Optimization of the adaptation resultativeness indicator and its costs The Nelder-Mead sim-
plex method

Discussion

To date, scientists have not developed a single method, methodology or model, the
use of which would solve the problem of assessing the resultativeness of the
adaptation of the enterprise. There are separate methods that can help solve individ-
ual tasks of assessing the resultativeness of adaptation. There is a need, based on the
study of the essence of the results and the resultativeness of adaptation, to propose an
author’s methodology for assessing the effectiveness of an enterprise’s adaptation to
the influence of market subjects. The tasks to be solved when evaluating perfor-
mance, and the methods suitable for this, are given in Table 6.
As a result of studying the available models and methods for assessing the
effectiveness of adaptation, as well as analyzing the methods of economic analysis
suitable for solving assessment tasks, the following were selected: to calculate the
Selection of Methods for Assessing the Resultativeness of the Company’s. . . 307

values of the adaptation efficiency indicator, a parametric method; to generalize the

calculated efficiency values, adaptation to the influence of suppliers, consumers and
competitors is an integral method; To establish the relationship between the com-
ponents of adaptation efficiency and adaptation costs, correlation and regression
analysis was used to analyze the dependence and its mathematical description; the
Nelder-Meade method was chosen to solve the problems of optimizing the adapta-
tion efficiency indicator.

Conclusion

The use of the proposed recommendations on the choice of evaluation methods will
provide information on the resultativeness of the adaptation of an industrial enter-
prise to market conditions formed by suppliers, competitors and consumers. The
information obtained will strengthen control over ensuring the economic security of
an industrial enterprise, as it will allow to identify the reasons for changes in the
resultativeness of adaptation to market conditions, to carry out a reasonable redis-
tribution of funds for adaptation measures, which will contribute to the economy of
enterprise resources against the background of improving the resultativeness of
adaptation.

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Institutional Support of ESG-Initiatives
Implementation for Sustainable
Development Transition

Nataliya V. Shekhova , Vitaly A. Mordovets , Olga A. Smirnova ,

and Ivan A. Shekhov

Introduction

Both achieving sustainable development and practical implementation of its main

goals have been catching the closest attention to modern scientists, politicians, as
well as the modern community in general. Currently, a special emerging of forming
the system of institutional sustainable development support is positioned as a
commonly recognized global priority.
The world community’s awareness of the need of transition to sustainable
development has become the main basis for active interaction between a state,
business structures, investors, trade unions and non-profit institutions (Pakhomova
& Aynabekova, 2022). The ESG-initiative has become considered to be the master
form of this interaction. According to experts, the international agenda in the field of
ESG can be interpreted as a business-oriented option for the practical implementa-
tion of the sustainable development concept.
At the same time, in spite of the fact the sustainable development concept was
accepted by the entire progressive world community several decades ago, many
theoretical and practical issues related to this concept are still remain standing over.
Despite the validity of the transition to sustainable development very idea itself,
which has been suggested back in the 1980s, there is not any single country in the
world which has managed to achieve its practical implementation and realization yet.
One of the reasons for this is the dominance of the traditional approach to reducing
environmental damage and the lack of necessary institutional conditions to

N. V. Shekhova (✉) · O. A. Smirnova · I. A. Shekhov

Saint-Petersburg State University of Economics, St. Petersburg, Russian Federation
V. A. Mordovets
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 309
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_27
310 N. V. Shekhova et al.

sustainable development transition. Among these conditions there are both appro-
priate regulatory support, and sufficient degree of templates for non-financial
reporting documents development.

Materials and Methods

The article is based on using methods of system-structural analysis, synthesis,

comparison and generalization, economic-mathematical modeling and logical con-
structions, induction and axiomatic deduction, which made it possible to identify the
paramount problems of sustainable development transition, taking into account the
institutional factors, such as legal support and non-financial reporting. The authors
formulate proposals for increasing the effectiveness of the institutional system
development based on the analysis of the obtained results.
The informational basis of the study was formed by regulatory legal acts,
scientific works of both domestic and foreign scientists and practitioners in the
field of Economic Theory, Environmental Economics (scientific articles and mono-
graphs, collections of scientific papers, analytical reviews, abstract journals, statis-
tical collections, reference books).

Discussion

The modern Russian economic science offers the following definition for the
interpretation of the of sustainable development content: “Sustainable development
is such social development in which its natural basis is not destroyed, the created
living conditions do not cause human degradation and socially destructive processes
do not develop to a scale that threatens the social security” (Danilov-Danilyan,
2019).
The fact of current lack of any effective way to ensure the transition to sustainable
development, both in Russian and foreign experience, as well as the fact of absence
of any really working “technology” for this transition, is not a subject for any
discussion today. The periodic initiation of controversy about the utopian nature of
the theoretical foundations of the sustainable development paradigm itself can be
considered one of the indirect confirmations of this.
Recently, against the background of the increasing interest in the problem of
sustainable development, some opinions related to the insufficient degree of validity
of the theoretical concept itself have been sounded. Hence the expediency for
maintaining adherence to traditional approaches is also go to become in doubt
(Ershov, 2022). Usually one of the main arguments of all of the opponents is that
the practical implementation of the sustainable development concept requires quite
amount of financial, technical, technological and organizational costs.
Institutional Support of ESG-Initiatives Implementation for. . . 311

But nevertheless, we have to admit that it is still necessary to look for and finally
to find the “technology” for the practical implementation of ESG-strategies, since the
current trends in the socio-economic and environmental development of society
invariably lead to a deepening and expansion of environmental, economic and social
problems.
In 2015, about 200 countries around the world agreed to adopt 17 interrelated
global Sustainable Development Goals (SDGs). All these goals determine the
paramount environmental and socio-economic priorities. The particular institutional
forms have been given to all these SDGs in the crucial document of the United
Nations General Assembly Summit called “The 2030 Agenda for Sustainable
Development” (UN, 2022). Russia was among the countries that accepted and
supported the SDGs.
In 2017, the international SDGs indicator system was introduced, on the basis of
which national indicator systems are being developed in different countries. These
national indicator systems take into account the interests and priorities of the
countries (Kurochkina, 2022). The corresponding national and regional ratings are
calculated being based on the international indicators systems.
The achievement of the SDGs is ensured by the practical implementation of
ESG-strategies, in which environmental, social and managerial tasks are combined.
These tasks go beyond the obligatory legislative requirements and play a kind of
benchmarking role for socially responsible and strategically oriented entrepreneur-
ship focused on innovation and advanced management methods (Pakhomova &
Aynabekova, 2022).
The fundamental content of both theoretical (conceptual) and practical (applied)
world community’s approaches to the necessity and possibility of the SDGs imple-
mentation mechanism of the national sustainable development strategies are
discussed quite widely in modern scientific literature (Alferova, 2022; Ignatov
et al., 2019; Chirkunova & Shekhova, 2021; Shekhova, 2022).
Even taking into consideration the fact that most of the countries all over the
world have developed their National Sustainable Development Strategies (NSDS)
by now, which are the major strategic documents of a fairly high level, since they
include all the paramount issues of the most important long term modern agenda,
these strategies, however, do not provide a direct corresponding between the actual
high quality of these documents, on the one hand, and the concrete results achieved
in practice, on the other hand.
It seems obvious that it is precisely the low efficiency of public institutions that
create incentives for the formation of a system for the practical implementation of the
NSDS that is precisely one of the main reasons for the current situation (Komarov &
Voloshinskaya, 2021). Although it should be noted that world experience shows
quite successful examples of the national ESG strategies implementation as well
(Ershov, 2022).
One of the latest UN reports says that if the current global trends in the field of
long-term development continue in the future, then the SDGs will not be fully
achieved by 2030 (UN, 2019). In this regard, the identification and analysis of
modern experiences in the development of NSDS for the sake of their further
312 N. V. Shekhova et al.

replication, including countries that do not have approved NSDSs (for example, in
Russia) or have not included the SDGs in their national strategic planning systems, is
an extremely urgent task.

Results

To create a system of practical tools for sustainable development transition, it is

crucial to change the fundamental approach to the implementation of ESG-strategies.
It means there is a need to gradually abandon the traditional approach in favor of the
institutional one.
Traditional tools for taking into account ESG-criteria for the purpose of sustain-
able development transition can be reduced to the following activities: installation of
environmental protection equipment, the implementation of waste disposal technol-
ogies, the establishment of bans or quotas (both for some actions and for using of
certain substances); application of fiscal instruments (environmental payments and
taxes).
All these tools often do not solve environmental problems, but even exacerbate
them. So, for example, despite the fact that a waste burning plant is formally an
object of ecological infrastructure, it can cause much more environment damage than
those enterprises which waste it burns.
Therefore, it is very important to apply institutional approach, gradually replacing
the traditional one with it. The institutional approach implies both the development
of proper institutional tools, and providing appropriate institutional conditions for
their successful application.
The institutional tools are based on improvement of organization and manage-
ment processes. It explains their fundamental difference from the traditionally used
technical and technological tools, which eliminate consequences, but not causes.
As for the security of institutional conditions, it is obvious that any methods are
“carried out” through certain institutions. This means that in order for the tools of
ESG-criteria implementation to support the achievement of the goals for which they
were developed, it is necessary to create appropriate institutional system. So, for
example, it makes no sense to set the most tough wastewater treatment standards, but
not to have a single water company capable of meeting these standards.
It does not make any sense to collect payments for environmental pollution in
order to compensate for environmental damage, in case these payments,
“dissolving” in the budget, are directed to completely different purposes, depriving
enterprises of the necessary sources for environmental protection measures
financing.
Prohibitions, norms, standards, payments and other instruments cannot work
effectively in case the appropriate conditions for their successful application are
not created.
Institutional Support of ESG-Initiatives Implementation for. . . 313

Today, among the main institutional conditions which are necessary for the
successful implementation of ESG-strategies are competent legal support and
improvement of the non-financial reporting mechanism.
It should be noted that the practical implementation of the particular policy
instruments of individual countries aimed at achieving the SDGs is complicated by
a number of problems, one of which is insufficiently effective level of legal and
regulatory support of the institutional system of transition to the sustainable devel-
opment. In particular, we are talking about the unsatisfactory quality of the
corresponding national strategies.
In Russia the active work for the creation and adoption of regulatory legal acts in
terms of the issues under discussion began in the 1990s and it has been ongoing up to
the present. The closest attention is paid to the analysis of the main applicable legal
and regulatory documents in the academic papers of many modern scientists
(Gukhman, 2021). But despite this fact, the NSDS has not been developed in our
country yet. The quality of the NSDS in the foreseeable future will continue to be
among the factors that really determine the success of the country’s transition to
sustainable development.
If we talk about Russia, then, according to experts (Pakhomova & Aynabekova,
2022), intensive modernization of regulatory and legal documentation, along with
increased efforts on the part of the Russian Federation Government, the Central
Bank, financial institutions and other interested companies (stakeholders), will
significantly contribute to the successful completion of the stage of practical imple-
mentation of the ESG principles. At the same time, it is noted that the increasing
pressure from stakeholders related to ESG issues leads to certain difficulties in
ensuring the financial stability of economic entities at the micro-, meso- and
macrolevels (Stolbov & Shchepeleva, 2022).
The implementation of ESG-strategies for the transition to sustainable develop-
ment transforms the behavior of key stakeholders. Thus, for example, at present,
manufacturers are beginning to adhere to the principles of environmentally and
socially responsible manufacturing, which involve minimizing the using of primary
resources in favor of increasing the circulation of secondary raw materials, as well as
increasing resource and energy saving, and reducing the negative technogenic
impact on the environment (negative environmental externalities).
The corresponding changes are taking place not only in the scope of production,
but also in the sphere of consumption. For example, households are reorienting
towards environmentally responsible way of consumption, which implies the refusal
to purchase unnecessary extra goods and services, the preference for long durability
goods, the sharing of goods, the reduction of household waste generation, separate
waste collection, energy saving, and so on.
Today, investors all around the world are increasingly adhering to the principles
of responsible investment, which involve priority financing of projects aimed at
achieving sustainable development, and assessing not only their economic effi-
ciency, but also their social and environmental consequences (Tretyakova, 2022).
In this regard, the information contained in corporate non-financial reports is
314 N. V. Shekhova et al.

becoming increasingly important. It is these reports that contain information about

the ESG-factors of business companies’ activities.
Currently, non-financial reporting is becoming a crucial factor of the investment
attractiveness of business companies. Potential investors are interested in the com-
pleteness and transparency of the data contained in non-financial or integrated
reporting documents.
The main problem is the lack of unified standards governing the order of
description of ESG-factors in corporate reporting (Tretyakova, 2022). In fact, there
is no single approved set of indicators that meet the criteria of responsible invest-
ment. Therefore, non-financial reports of business companies differ significantly
from each other in their structure, set of indicators and content, which significantly
complicates the possibility of their comparison and analysis when making invest-
ment decisions.
Today the lack of effectiveness of the relevant mechanisms is an obstacle to the
implementation of ESG-strategies in most countries of the world.
The special attention should be paid to the factors of development of the “green”
economy when developing strategic documents related to sustainable development
(Glazyrina, 2020; Bobylev et al., 2019). Qualitative factors of environmentally
sustainable development and a “green” economy in Russia are described in full
details in modern scientific literature. This description is based, among other things,
on consideration of the processes of environmentally sustainable development and
the “green” economy within the framework of interaction between a state, a business
and a society (Kiryushin, 2019).
Many problems of forming a “green” economy are based on the lack of public
administration mechanisms effectiveness, as well as financing instruments effi-
ciency. Currently, the search for ways to solve these problems is taking place
through the creation of so-called “green” courses, which are “a combination of
political will, ambitious goals and consistent state policy” (Ershov, 2022).

Conclusion

To achieve the main goals of sustainable development, recognized today by the

world community as the most important global priority, it is necessary to ensure a
gradual refusing the traditional approach to implementation ESG-strategies in favor
of the institutional one. It means both the development of institutional instruments
themselves and the creation of the appropriate effective institutional conditions for
the practical implementation of national ESG initiatives. Among those institutional
conditions that are of particular relevance are appropriate regulatory support and
improvement of the non-financial reporting mechanism. Today the lack of effective-
ness of the corresponding mechanisms is considered to be the obstacle to the
implementation of ESG-strategies mechanism in most countries all around the
world.
Institutional Support of ESG-Initiatives Implementation for. . . 315

It is the preparation of thoughtful legal acts, as well as formal procedures for the
preparation and presentation of the results of non-financial corporate reporting,
taking into account the opinions of broad academic, business and public communi-
ties, together with a secured mechanism for implementing the requirements
contained in them, that will work to achieve sustainable development, based on
the successful results of the best world experiences.

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Eye Tracking as a Research and Training
Tool for Ensuring Quality Education

Marianna Ababkova , Irina Melnikova , and Olga Vasileva

Introduction

Research activities based on new technologies and neuromarketing tools are mostly
developed in the research firms and not so much in academia (Ababkova &
Leontieva, 2018; Shearer et al., 2020.). Some authors warn that ignoring such a
considerable development would mean that universities’ students would be outcasts
of current research practices (Agarwal & Dutta, 2015). Therefore, introducing new
forms and techniques of research activities into educational process could be both
technological development within the curriculum and a serious encouragement for
students’ research activity in media education.
To achieve the objectives of advertising it is crucial for marketers to thoroughly
understand not only the structure and elements of advertising, but also to tailor a
complex set of multimodal determinants according to the laws of perception to
ensure its effectiveness. It is critical to study how recipients interact with an
advertisement to improve their experience (Lévêque & Liu, 2019).
Traditionally advertising research used to be carried out on the basis of such
conventional tools as verbal techniques (surveys, interviews, focus groups, etc.),
rendering respondents’ attitude and emotions to an object under review (Krivcova

M. Ababkova
Saint-Petersburg Electrotechnical University “LETI”, St. Petersburg, Russian Federation
e-mail: [email protected]
I. Melnikova
Peter the Great St. Petersburg Polytechnic University, St. Petersburg, Russian Federation
e-mail: [email protected]
O. Vasileva (✉)
Herzen State Pedagogical University of Russia, St. Petersburg, Russian Federation
e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 317
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_28
318 M. Ababkova et al.

et al., 2020). However, some researchers criticize traditional marketing research for
not yielding consumers’ percept or comprehension of a marketing driver, but rather
identifying consumers’ reactions to researchers’ conceptualization of a stimulus
(Gebhardt et al., 2020; Nasr et al., 2018). Some researchers point out that advertising
message as a creolized text requires an adequate approach to the research method-
ology, since it represents a special system in which a final meaning is generated not
by a simple sum of incorporated verbal and nonverbal components, but by their
particular interaction (Dediurina, 2021; Bulatova et al., 2015). Thus, advertising
phenomenon requires a comprehensive and multidisciplinary study.
In recent years, the methods of cognitive neuroscience such as eye tracking and
biofeedback contribute immensely to the understanding of merging conscious and
subconscious reactions to advertising messages to improve a communication cam-
paign effectiveness (Borawska et al., 2022).
Oculography, gaze tracking or eye tracking is a tool to scan visual stimuli or their
elements and to get the detailed visualized information about the parts of a static or
dynamic image to specify where respondent’s attention lingers on, which part goes
unnoticed, or causes an emotional response. Eye tracking, although not yet a
dominant technique within communication research, helps to manifest a measure
of attention to a stimulus to reveal the objects of interest and individual content
processing (Cummins, 2017).
Moreover, an advertisement as an integrative media text with visual figurative
and verbal parts equivalent in meaning attracts interest and causes a certain cognitive
load. This cognitive load expressed in recipient’s eyes fixation on various parts of an
advertising item can be investigated with the help of an eye tracker. Nowadays this
research technique plays an essential role in assessing the nature of the perception of
such multidimensional messages (Bulatova et al., 2015). Thus, eye tracking enable
researchers to identify key areas of advertising layout that attract the respondent’s
attention, as well as to study reading strategies for various combinations of adver-
tising message.
As a literature survey reveals, nowadays the eye tracking could be employed
within the following educational areas:
– Eye tracking research for the educational process, as a tool for continuous
improvement to fit in the learners’ requirements and perception of teaching
materials, handouts, e-books and multimedia (Sun et al., 2018; Rohbock &
Jagoda, 2011; Rosiek & Sajka, 2017). The researchers also could seek a deeper
understanding of the complex interactions during online and offline classes and
adapt practical suggestions to improve online teaching skills (Shi & Stickler,
2021; Knoeferle & Crocker, 2009);
– Eye tracking for linguistic studies and foreign language teaching (Sagarra &
Aroline Seibert, 2011; Paolazzi et al., 2021);
– Eye tracking as a part of research activities for academics, educational practi-
tioners and students. Adapting eye tracking as a new research tool to the special-
isms of media education can provide not only intensive intellectual, emotional
and physical participation of the students in research practices, but also increase
Eye Tracking as a Research and Training Tool for Ensuring Quality Education 319

their involvement due to learning new research techniques. Eye tracking could
encourage students to join a research lab, form research groups, cooperate and
exchange ideas with their peers, and thus to up bring new generation of
researchers in a period of technological advances (Chisega-Negrilă & Chisega-
Negrilă, 2018);
– Eye tracking for testing university’s communication strategy (sites, outdoor
advertising, etc.) (Ababkova & Leontieva, 2018).

Materials and Methods

A master class was designed within the lecture’s theme “Strategic International
communications” for the students of the first grade of the Master Programme
“Advertising and PR in International Communications”. It was aimed to test the
applicability of this new technique as a part of training of advertising practitioners,
and to demonstrate the peculiar features of research process and metrics of eye
tracking on the example of social advertising. The research took place at the Center
for Sociological Research and Digital Communications, an educational and research
unit of the Higher School of Media Communications and Public Relations of the
Institute Humanities (Peter the Great St. Petersburg Polytechnic University).
The master class consisted of 30-minute lecture on social advertising and new
research tools based on neurotechnologies. The idea was to create awareness of the
students about the eye tracking study, and to demonstrate them the whole process
and the metrics, and at the same time to obtain data clarifying the process of
perception of social advertising dedicated to vaccination against Covid-19.
Afterwards the pilot eye tracking research and interview session was carried out.
The students took part in the pilot study and monitored the research process. The
experiment was guided and supervised by two lecturers. The eye tracking research
was enhanced with an interview in order to compare results of verbal and non-verbal
techniques in advertising studies, and to demonstrate the possibility of combining
conventional and innovative techniques.
A total of 38 students (28 females and 9 males) participated in the master class
and the pilot study. This sample size is usually recognized as representative in
research based on the eye-tracking technology (Wedel & Pieters, 2008; Muñoz-
Leiva et al., 2019).
The hypothesis of the study was that the number of gaze fixations could be used
as a marker of attention selectivity of the respondents, so called areas of interest
(AOI).
The experiment was carried out in a quiet room isolated from external noise, with
a diffused light (200 Lux) to simulate a “home environment”. Eye movements were
registered by an infrared video eye tracking device (Gazepoint eye tracker GP3
(60 Hz), Canada), measuring the reflection of the cornea and pupil at a frequency of
60 Hz. The system has a spatial tracking accuracy of approximately 0.5°–1° viewing
angle. The data were processed with “Neuroburo” software (St. Petersburg, Russia).
320 M. Ababkova et al.

The process of the eye-tracking study consisted of several stages:

– The introductory (preliminary) stage. The participants were seated at a desk in
front of the LCD monitor, and received instructions for the procedure. At this
stage, a respondent had to sign a written consent statement with basic information
about the research project and personal information (first name, last name and
signature). The participant was fully informed about the purpose of the study. For
each respondent a nine-point calibration of the eye position was performed to
optimize the accuracy of spatial tracking.
– The experimental stage. The respondents were presented with 2 types of social
advertisement, there was no time limit for viewing the images. All the advertise-
ments presented during the test were dedicated to the vaccination program as a
main prevention measure against Covid-19, and contained fear and shame appeal
as one of the most popular exhortations in social advertising (Mičík & Tesařová,
2018). The example№ 1 consisted of a text part and a visual part of equal
importance in the ad’s composition. The second example was composed mostly
of a text; its slogan was stylized as a СTA-button with a cursor.
Before starting the eye tracking study, the respondents were asked the question
“Which element of social advertisement, in your opinion, is more significant?”. A
larger number of the respondents (27 people) pointed to the photo (“attracts atten-
tion”, “conveys the idea of advertisement”), the rest of the respondents noted that
everything depends on the complexity of the topic (“scientific data is needed”, “text
conveys meaning”, “text explains better”).
The second part of the study included the demonstration of two specimens of
social advertisement on a 17-inch monitor with a resolution of 1920 × 1080 pixels.
The eye tracker was located at a distance of about 75 cm from the respondents,
without head fixation to ensure conditions close to reality.
After the eye tracking session, the follow-up interview with the participants was
held to reveal the respondents’ attitude toward the chosen advertisement samples.
The participants went to a second room and responded to an interviewer comprising
queries regarding socio-demographic details and their verbal evaluation of the ads.
– The final stage provided the experimenters with feedback of the participants on
the importance of the master class and its significance to their specialism.

Discussion

A number of indicators obtained through eye tracker, such as the gaze duration on
the advertisement and its verbal and visual parts, the number of fixations and the
average gaze duration on each of the areas, the user’s eye motions and a pattern, help
to get an accurate idea of what happens during the respondent’s contact with the
advertisement (Bulatova et al., 2015; Al Dahhan et al., 2016). For example, a
number of studies have proved that the saccade speed (rapid eye movements in
Eye Tracking as a Research and Training Tool for Ensuring Quality Education 321

Table 1 Means for gaze duration and number of fixations

Stimuli data Advertisement №1 Advertisement №2
Total viewing time (ms) 628 + -13.4 454 + -10.1
Text viewing time (ms) 194 + -6.2 401 + -6.0
Picture viewing time 434 + -7.2 53 + -4.1
Number of fixations 42 + -7.1 22 + -5.3
Fixations on text 16 + -3.2 16 + -1.2
Fixations on visual part 26 + -3.9 6 + -4.1

Fig. 1 Example of a gaze

plot for the advertisement
№1

one direction) can act as indicator of cognitive load, and anxiety may be associated
with a decrease in the speed of antisaccades (gaze movement in the opposite
direction) as a response to the presentation of threatening stimuli (Derakshan et al.,
2009), which could be a useful indicator in studying recipient’s feelings during the
contact with an advertising message. Other studies argue that microsaccades (small
saccades within the process of gaze fixation on a visual target) rate reflects visual
load of a task rather than its mental load (Schneider et al., 2021). However, there is
no data yet acquired to report the notable features of perception for other types of
emotionally charged information (Kozhuhova, 2015).
As a result of the study, heat maps and gaze plots were obtained to form a set of
data to characterize gaze fixation and areas of interest. As the number of fixations or
fixations count is a very general measurement which needs to be completed with
others (Holmqvist et al., 2011), a metric of viewing time was introduced. The general
viewing pattern of two examples of advertisement through the visual metrics is
presented in the table below (see the Table 1).
Most of the fixations and the duration of saccades were recorded for the adver-
tisement№1 on its visual part (Figs. 1 and 2).
The participant’s gaze analysis revealed that the 78% of respondents first focused
on the physicians, their masks, white coats, and then the participants’ gaze moved to
the text part of the advertisement. The СTA-button and the cursor that were
originally conceived as a central part of the layout, attracted less attention that the
text in the upper part of the layout.
To test the hypothesis about the applicability of the number of fixations as a
marker of attention selectivity of the respondents, areas of interest (AOI) were
322 M. Ababkova et al.

Fig. 2 Example of a gaze

plot for advertisement №1

Fig. 3 Analysis of the heat

Lower Part of the Text
maps for the ad №1 (the
number of fixations)
Upper Part of the Text

White coat

Masks

Physicians

0 10 20 30 40

Fig. 4 Analysis of the heat

maps for the ad №2 (the
number of fixations) СTA-button and Cursor

Upper Part of the Text

0 10 20 30 40

highlighted. The analysis of the respondents’ heat maps identified the following
AOIs (Figs. 3 and 4).
Thus, the AOIs for the sampling №1 include physicians’ faces, masks, and the
lower part of the text. Of note that the upper part of the text, according to some
sources (Muñoz-Leiva et al., 2019) as the most engaging and appealing to the
recipients, should be written in a larger font and located in the upper part of the
visual field, however, attracted less attention of the respondents. Also, the СTA-
button and the cursor from the sampling №2 were less attention-grabbing elements.
Eye Tracking as a Research and Training Tool for Ensuring Quality Education 323

Results

Perception schemes of a social advertisement layout give an idea of the nature of

cognitive activity of respondents (Bulatova et al., 2015), and the sequence of
processing its visual and textual parts. Table 2 shows the number of the respondents
who applied one or another reading strategy for the social advertisements.
The majority of respondents began to study the sample No. 1 from the photo of
physicians, then moved their gaze to the text; the pattern of perception of the sample
No. 2 was opposite: text first, then the image of the CTA button. The tested sample
No. 1 was also characterized by the repeated gaze movements between the image
and the text more than 3 times.
In general, respondents paid more attention to the tested sample
No. 1 (on average, 628 ms) compared to the advertising sample No.2, since the
images of doctors more vividly represent the problem situation and the essence of the
advertising idea.
The follow-up interview included the respondents’ verbal assessment of the
attractiveness of the presented social advertisement samples. It was found that
sample No. 1 appeared to be more appealing, as the embodiment of the idea of the
noble work of doctors and a call for help in a difficult situation.
The majority respondents (85%) said that they prefer the sample No. 1 and
described it as comprehensible, morуgentle, the words and visual image could be
interpreted as encouraging. The advertisement appeals to a sense of responsibility, it
could be deciphered as a call to cooperate in a difficult situation, this incentive could
ensure the effectiveness of the advertisement. The sample No. 2 was assessed by the
overwhelming majority of the respondents (83%) negatively. They portrayed it as
“disgusting”, “empty”, “uninformative”, “frighting”, evoking a feeling of guilt. The
further studies could be recommended to find the connection between the speed of
antisaccades and the emotional response to the negative stimuli.
A brief survey concluded the master class, and its results showed, that more than
60%respondents believe that eye tracking could be used for usability tests of
websites, perception analysis of advertising layouts to guide target audience

Table 2 Schemes of perception of social advertising in the experiment

Advertisement Advertisement
Schemes of perception №1 №2
Text–image (three or less gaze movements from text to 2 21
image)
Image–text (three or less gaze movements from image to 30 –
text)
Text–image–text 4 7
Image–text–image 1 4
Text–image–text– image 0 1
Moving the gaze more than three times gaze movements 1 1
between the image and text
324 M. Ababkova et al.

attention. According to the students, the use of such research technique in education
broadens horizons both for educators and learners for better understanding of
attention triggers (84%); introduces advanced technologies to the educational pro-
cess (98%); stimulates students’ creativity (92%); facilitates the understanding of
complex research techniques (64%%); enhances students’ involvement in research
activities (34%). 63% participants said that they were inspired to design the adver-
tisement layout more thoroughly considering patterns of recipient perception. The
following key barriers for the implementation of high-tech research techniques in
education were outlined as follows: technique can be very expensive (24%), serious
training and preparation is required to use eye tracking as a research technique
(89%). 76% of the students added that they would like to take part in the experiment
based on eye tracking again.
The hypothesis of the applicability of the number of gaze fixations as a marker of
attention selectivity of the respondents, areas of interest (AOI) was proved to be true.

Conclusion

As the pilot research has shown, the application of emerging research technologies
has a great potential for educational practitioners in quality education. Eye tracking
technology as a tool for ensuring quality education makes it possible to explain the
learning process from different points of view and provide reliable empirical data on
the main cognitive processes of information processing during offline and online
study, etc. (Jarodzka et al., 2017; Suero Montero et al., 2022; Rodrigues & Rosa,
2017). It helps to improve the teaching progress and efficiently integrate different
hi-tech research techniques in education (Sun et al., 2018). As some studies from the
current century suggested there is a direct relationship between saccade count and
cognitive workload, and, to be more precise, the higher cognitive workload is
associated with a greater number of cascades (Mondal & Majumdar, 2020). Thus,
eye tracking for education could provide educational practitioners with the informa-
tion on the difficulty of teaching materials, the user interface design issues and
ineffective presentations (Mat Zain et al., 2011).
The verbal techniques combined with the eye-tracking allow to increase the
validity of research, for example, a follow-up interview allows to clarify some
aspects of the recipient’s interaction with the stimuli; the “thinking aloud” technique
(Shi & Stickler, 2021) during the oculography session helps to gain respondent’s
comments about his interaction with the test sample. In the case of using mix
techniques, the reliability and accuracy of the eye tracking increases. It is
recommended to carry out additional studies based on eye tracking, including such
parameters as the pupil diameter, to evaluate the emotional aspects of the visual
stimuli.
Also, eye tracking in media education could be considered as an additional tool to
encourage students to participate in multidisciplinary research activities and to make
Eye Tracking as a Research and Training Tool for Ensuring Quality Education 325

them active and motivated participants in their learning, to have an insight into the
processes of advertisement’s perception on the basis of hi-tech techniques.

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Improving the Methodology for Calculating
the Index of Growth of Small
and Medium-Sized Businesses

Elena V. Yaluner , Mikhail G. Voronin, and Alexey B. Zelensky

Introduction

At the current situation of a pandemic, exacerbation of the economic and geopolitical

situation, one of the important tasks of reducing uncertainty factors in assessing the
situation and making decisions is the task of obtaining accurate and up-to-date data,
both with increasing the availability of data for analysis for market participants and
the subjects of the sector under consideration. Solving this problem will make it
possible to manage and support the small and medium-sized business (SME) sector,
reasonably and competently choose priority measures in the context of medium-term
and long-term planning for the development of SMEs, and make up to date changes
to the content of federal and regional programs while monitoring the results of their
implementation.
In studies on the distribution of enterprises by the number of working places in
Russia, it demonstrates the predominance of the importance of large business
entities, the data are reflected in the report The EU in the world for 2020. In the
light of this distribution, the policy is understandable, which is indicated, among
other things, by responsible leaders and top officials of the state. Russian Prime
Minister Mikhail Mishustin constantly points out the need to clarify real employ-
ment in small and medium-sized businesses.

E. V. Yaluner (✉)
Saint-Petersburg State University of Economics, St. Petersburg, Russian Federation
Institute for Regional Economic Studies Russian Academy of Science, St. Petersburg, Russian
Federation
M. G. Voronin · A. B. Zelensky
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 329
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_29
330 E. V. Yaluner et al.

This, firstly, will make it possible to understand how Russia’s indicators differ
from those of developed and most developing countries, and secondly, to assess the
social effect of the SME sector in terms of job creation. The emphasis on this aspect
is also important, in the opinion of the authors, because many officially registered
small and medium-sized businesses do not have a significant impact on the econ-
omy, due to the lack of active operating activities and the provision of a minimum
amount of contributions. In the opinion of the authors, the social effect of the
activities of these enterprises is manifested in the fact that, on the one hand, their
existence provides both the possibility of legalizing the operational activity of the
shadow sector and the prospects for the development of entrepreneurial initiatives.
On the other hand, such entities form the prospects for competitiveness and
demonopolization of their industry, helping to overcome the formal barriers of
“consistency” of legal entities, which are set by many private and state companies,
including in public procurement in accordance with federal laws 223-FZ and 44-FZ
(Yaluner et al., 2018).
According to the modern methodology developed by the Ministry of Economic
Development of the Russian Federation, it is supposed to receive employment da-ta
in the SME sector on insurance premiums, which really looks more promising than
the current methodology of Rosstat. In addition, employment in the SME sector, as
the main social indicator of the sector, should have an update frequency comparable
to the update frequency of the SME register data. However, it should be taken into
account that the share of “gray” entrepreneurship is highest among small and micro
enterprises, and their contribution to the economy and jobs based on this methodol-
ogy will not be taken into account. Therefore, despite the fact that it is logical to take
into account enterprises operating on a legal basis, this approach will distort the
results of the contribution of the SME sector to the country’s economy, and most
importantly, it contradicts the sustainable development goals recommended by the
UN—protecting jobs, supporting small and medium-sized enterprises and workers
in the informal sector through economic response and recovery programs
(Mordovets et al., 2019).
Therefore, workers in the shadow sector also need to be protected and their
contribution to the country’s economy should be taken into account, realizing that
such work is structurally negative, but economically positive.

Materials and Methods

Currently, due to the difficult geopolitical situation, a situation is emerging in which

a significant part of the shadow sector, the so-called “gray economy”, has a predom-
inant share of a positive impact on the economy—it creates jobs, fulfills the needs of
citizens in increasing the speed of business transactions. The destructive impact on
the established economic and political system is not lost. In addition, most of the
small and medium-sized businesses are in the shadow zone solely due to economic
feasibility, most often associated with the inability to work equally effectively
Improving the Methodology for Calculating the Index of Growth of Small. . . 331

legally. The increase in the shadow sector should first of all push for lowering
barriers, sharing the responsibility of social guarantees with the most economically
vulnerable employers and maximum motivation to get out of the shadow, rather than
stimulating by increasing the tax burden and delegating social responsibility to the
enterprises themselves, since in this way the state does not contribute to the devel-
opment of enterprises in the short term.
Expert assessments, for the most part, also suffer from the lack of dynamics.
According to the national report of the global monitoring of entrepreneurship in
2012, “The most frequently mentioned factor negatively affecting the development
of entrepreneurship in the country by experts was the policy of the state”. The
situation is similar in all other global monitoring reports, the only thing that has
changed is that the wording has become tougher “Corruption at all levels of
government has been increasingly mentioned in recent years as a factor hindering
doing business in the country” (Mordovets et al., 2019; Litau, 2017).
Corruption does not leave the agenda at all and, in principle, is considered as a
general destructive factor that can be mentioned when developing any problem. And
despite the fact that corruption is really destructive, in the level of business activity or
the main problems of the SME sector, this is not a problem of the first echelon, as the
business community itself says in the same surveys. Thus, the interviewed experts
issue practically the same recommendations, but the implementation of these rec-
ommendations in the proper way either does not occur at all, or the expert commu-
nity does not want to see them. We’re leaning towards some-thing that doesn’t
happen at all.
All this demonstrates the fact that expert and entrepreneurial assessments are
“frozen” in certain ranges and their quick response to changes in the environment
should not be expected (Voronkova et al., 2016). Therefore, a more objective and
faster mechanism is needed to obtain representative data on the state of entrepre-
neurship and its growth potentials in order to adjust the policy of support and
regulation of the SME sector in accordance with the results obtained (Litau, 2018).
Under the most favorable conditions, it is possible to develop such an index or
indicator that will be sufficiently significant and understandable to inform about the
situation in the SME sector within the framework of the task of the Federal Project
“Acceleration of small and medium-sized businesses”, which includes “Creation of a
digital plat-form focused on information support for the production and marketing
activities of small and medium-sized businesses, including individual entrepreneurs”
(Litau, 2019).
The “SME Growth Index” can become such an indicator, since it takes into
account the main parameters of a particular SME entity, which means it can meet
the needs of indicative planning both at the federal and regional levels, without
which not a single large economy can do in the modern world.
However, the methodology for calculating the SME growth index is far from
ideal; in the SME index, initially, the indicator of the average number of employees
of SMEs was of very little importance, which is the main element of both the scaling
of companies and their stability (due to the talent pool), not to mention the maximum
the social significance of this parameter. Even with a reserve in revenue and
332 E. V. Yaluner et al.

structural flexibility, it is quite difficult to hire professional people, especially in a

crisis, and based on this index methodology, a company with the maximum growth
prospects and stability to change is a one-person company with the maximum salary
to revenue. Especially many questions are raised by the actualization of the problem
of intellectual capital as an asset of the company (Vetrenko et al., 2017). Profit in this
case will be minimal, but it is not taken into account, and the number of employees
has only 1/5 of the influence on the index. In relation to self-employed citizens or
exclusively family or personal enterprises, such a technique would be understand-
able, but in this case it excludes the significance of the social aspect of SMEs, and
most importantly, it distorts the real state of affairs in the sector and the ability to
scale entities that do not invest enough in human capital, nor in the personnel
management system itself, which is even more critical for the regions (Vetrenko
et al., 2017).
Another significant problem in assessing the number of employees in the sector
has been and remains the methodology for estimating the number of employees in
the sector, not as a general value for the regions and the country, but as the ratio of
the number of employees per 1 enterprise, which is incorrect due to the distortion of
values in the event of a decrease in the number of entities, while even if the gross
number of employed will decrease, and with it the number of SMEs will decrease
even more rapidly, then the indicator will grow, which is logically not true. The SME
growth index does a good job of characterizing the “average” SME entity in general
and in a specific group of regions, demonstrating its performance, which is very
good when considering a specific entity outside the market or in an established
market, but incorrectly when the market, industry or sector as a whole is highly
dynamic. In the limit, even with excellent indicators taken into account, if the market
narrows and locks into a few participants that grow and strengthen, the SME sector
will not rise quickly, just the entities that can evolve will go beyond medium-sized
businesses, and the rest will leave the market and disappear. An unfortunate ending
that is unlikely to happen in a seller’s market as new SMEs will fill the niches of
departed enterprises, lowering the level of added value to compensate for the lack of
other competitive advantages, but is quite expected in the buyer’s market, since the
level of added value and so can only be available given a certain scale. It is unlikely
that the incompressible remnant of SMEs living in the seller’s market, since they
simply realize their near-monopolistic logistical, political and information advan-
tages and thereby survive, will perfectly reflect the state of affairs in the sector and its
growth prospects, even if their revenue and the average number of employees will
grow. The main destructive component of the logic of defining the “average SME
entity” by the index, and not the sector as a whole, is the impossibility of quantifying
the expected effect for the entire sector in the implementation of government pro-
grams, although such an assessment is a necessity for a programmatic approach
(Yaluner et al., 2018). The solution to this situation is the synergy of both the “
microdata “ already used in the SME Growth Index and industry-wide data collected
by government agencies.
The existing indicator of the SME Growth Index was updated in 2020 and takes
into account the employment of the population more significantly, which, in our
Improving the Methodology for Calculating the Index of Growth of Small. . . 333

Table 1 Recommended SME growth stage ranges

Name stage Explosive height Heyday Moderate height Stagnation
Range values From 50 to 45 From 45 to 35 From 35 to 10 From 10 to -10
Length range Δ5 Δ10 Δ15 Δ20
Range values -50 to -45 -45 to -35 -35 to -10 From -10 to 10
Header level A crisis Depression Reject Stagnation

opinion, is very correct. But the methodology still does not reflect the picture,
including because of the use of “average employment”. The SME Growth Index
does not correlate with the above-mentioned surveys, which show that the assess-
ment of the situation by representatives of SMEs through the aggregate index from
03/25/2020 decreased by 09/07/2020 from minus 33 points to minus 39 points.
Thus, having fallen below the level of the post-crisis 2015, which, even taking into
account the general stagnation of the indicator in the polls, is significant, as it has
overcome the historical milestone. While the SME Growth Index, according to the
new methodology, balances between “stagnation” and “moderate growth”, and in
the range from -50 to +50 is only in positive values.
Here we see the problem of incorrect assessment of the ranges of values of the
Indices that characterize growth, stagnation or decline. Based on the logic of
de-creasing importance of values for a particular stage, it would be logical to present
the lengths of the stage ranges in accordance with the logic presented in Table 1.
Therefore, the boundaries of growth are more clearly defined, and the significance
of the Index values increases with the increase of the Index itself, as it happens in the
economy, since each subsequent percentage of growth or decline is more difficult or
has more destructive consequences than the previous ones. In the future, with the
ranges from Table 1, it will be possible to adjust in accordance with the distribution
function of the values of the historical sample, possibly taking into account eco-
nomic cycles and the reduced/increased significance of positive values during the
exit from the recession and negative ones at the heyday stage, that is, to form a
floating range.
Index of the old calculation mechanism per 1 sq. and 2 sq. was strictly higher than
the indicators for 2kv. 2019, and the number of enterprises in the sector is below the
level of 2019 Q2 according to the SME register. At the same time, the SME Growth
Index, calculated according to the new methodology, fell from Q1 to Q2, and grew
from Q2 to Q1, although the number of SMEs, compared with the data for 2019, fell
by 2.23% in the first quarter, by 2.61% in the second quarter, and 3.46% in the third
quarter. The SME growth index does not reflect the total number of sector entities,
neither in the old nor in the new version of the methodology (Yaluner et al., 2018).
Unfortunately, it cannot be said that this is consistent with the stated goal of
characterizing the degree of development of the SME sector. The same problem
arises on directly dependent indicators, in particular with the sum of the average
number of employees employed by small and medium-sized businesses
(in accordance with the assessment methodology). This indicator objectively stag-
nated in a moderate range with a slight decrease and a slight increase throughout the
334 E. V. Yaluner et al.

first half of 2020. Having a deviation between the January 15 321,788 and June
15,295,920 data less than 0.1%, and then after a one-month decline having a
significant jump. This dynamic is very logical, given the delay between the pan-
demic restrictions and the reduction of employees, even in a forced economic
situation, further smoothed out by government support measures. This is not seen
in the SME Growth Index, even taking into account the volume of revenue and the
size of the wage fund, cost reduction packages at enterprises were adopted in stages.
And in industries that felt the fall in purchasing power later than others, they were
not accepted at all in the second quarter.
An inverse correlation with indicators is not achieved, for example, with the
dynamics of workers who performed work under GPC contracts in% of the month of
the previous year according to Rosstat. Fundamentally, these indicators are only
indirectly related, but employees who decided to earn money on GPC contracts for
the most part either got on the stock exchange or would appear to be employed in the
gray or formal SME sector (Yaluner & Moisenko, 2016). Only a small proportion of
them would have remained without earnings and the status of the unemployed, or got
a job in the staff of large companies during the crisis. However, there is no inverse
correlation, which tells us about the insufficient significance of the real number of
employees in the SME sector, in contrast to the average number of employees per
1 SME.
Thus, the current calculation methodology achieves the following effect—the
SME growth index shows the state of affairs in the sector, but due to its calculation
methodology, the data are overestimated. Consider the current calculation method in
more detail:
The current formula is quite simple and capacious; in general terms, it can be
written as follows:

ðX i
ai Þ, ð1Þ

where x1—The ratio of revenue per 1 SME (for the period, rubles);
x2—Payroll ratio per 1 employed person (on average per month for the period,
rubles);
x3—The ratio of the number of employees per 1 enterprise (for the period,
people);
ai—Appropriate indicator significance weights.
Revealing the dimensions of the indicators, the change of which is taken into
account by the Index, without taking into account the weights, we get the following:

rub: rub: people

þ þ , ð2Þ
1 SME 1 people 1 SME

In other words, the current methodology for calculating the SME Growth Index
assumes an increase in the Index from indicators fundamentally important for
growth, such as an increase in the total cash flow and an increase in payroll, or an
Improving the Methodology for Calculating the Index of Growth of Small. . . 335

increase in the number of employees per 1 SME. In addition, the increase in the
Index comes from indicators that are significant only for a particular subject, and not
for the sector as a whole, in particular, the index will grow from a fall in the total
number of SMEs, an increase in “dead” SMEs with near-zero indicators, and so
on. From the method of calculating the Index, it turns out that if tomorrow half of the
enterprises in the SME sector close, and the rest maintain conditions for employees
and increase revenue, then the Index will show growth, or stagnation, although a
crisis will actually occur in the sector and in a country with enormous unemploy-
ment. Due to the ratio of gross values in different periods, the dimension is blurred,
but the fundamental significance of the indicators remains, and the current method-
ology does not allow achieving the stated goals of the main analytical index, on the
basis of which it is possible to predict the development of the SME sector as
accurately and quickly as possible.

Results

Methods for solving the problem are presented to us as follows. Based on the
principles on which the first 3 indicators were chosen (ability to collect up-to-date
information, reliability, significance for the sector and subjects), it would be advis-
able to consider such an indicator as “total number of SMEs”. This parameter will
characterize both the general demographics of the sector and potential entrepreneur-
ial activity, as well as the level of entrepreneurial initiative, the flexibility of the
sector, its volume, and will allow moving away from consideration of many
one-dimensional subjects to consideration of the sector as a whole.
Data aggregation for this indicator can also be performed by the Federal Tax
Service, through the register of SMEs, which, in accordance with the new method-
ology for accounting for citizens employed in the sector, aggregates the indicator of
employment in the sector, it can be updated with adequate frequency and be
promising for division by regions, sectors of the economy and taxation systems.
Data on the total number of entities will form a general picture of the sector, data
on the number of employees (total, not per 1 SME) will reflect the social features and
significance of the sector, data on revenue and payroll provided by the banking
sector will help show the financial component of the processes, as with in terms of
income as well as in terms of expenses.
The basic formula remains the same as in the original methodology (1), but at the
same time it changes x3 from the ratio of the number of employees per 1 enterprise to
the ratio of the number of employees employed in the SME sector (for the period,
people), and adds x4—the number of SME sector entities (for the period, units).
Then the disclosure of dimensionality indicators is as follows:
336 E. V. Yaluner et al.

Table 2 Aggregated variations of the parameter significance coefficients

Variations Indices SME growth Odds significance parameters
Financial Social
Name type index Revenue FOT Qty employed Qty subjects
Socially prevailing index 0.1 0.1 0.4 0.4
Financially prevailing index 0.4 0.4 0.1 0.1
Current index SME growth 0.2 0.4 0.4
Featured index with financial bias 0.3 0.3 0.2 0.2
Recommended index with social bias 0.2 0.2 0.3 0.3
Equilibrium index 0.25 0.25 0.25 0.25

rub: rub:
þ þ ðpeopleÞ þ ðSME Þ, ð3Þ
1 SME 1 people

In this case, the increase in the total number of employees and the total number of
SMEs will correlate with average wages per employee and average revenue per
enterprise through market mechanisms and more fully reflect the situation in the
sector.
In the indicator type, a brief description of the prevailing significance of the
indicator is given. Based on these characteristics, we have considered the general
possibilities of changing the weights of the significance coefficients, ai illustrated in
Table 2.
The step between the weights of the coefficients can be made even smaller to
increase accuracy, but the current step of 0.1 or 10% of significance allows you to
clearly demonstrate how different the indices will be with different considerations,
primarily of social and financial parameters, and also how much such indices differ
with index calculated according to the current methodology. Due to the obtained
variations in the weights of the coefficients, we calculate the growth indices of SMEs
using the current method of accounting for the number of employees in the sector
(per 1 SME), as well as using the method of accounting for the total number of
employees in the sector (Table 3).
As can be seen from the tables, the growth index of SMEs, taking into account the
total number of employees, is always lower than taking into account the number of
employees per 1 SME, which, in our opinion, is more correct, since it takes into
account the negative dynamics of employment in 2020 in the sector compared to
2019, and is also logically related to the target indicator of the national project
“Small and medium-sized businesses and support for individual entrepreneurial
initiatives”, where the target is indicated in million people, and not the average
number per 1 SME enterprise. In addition to the general state of the sector, overall
employment also allows for a more correct correlation with the state of affairs in
specific regions, due to the fact that the total number of people employed in the
region may have a different ratio to the total number of people employed in the SME
sector in the region, which will directly affect the significance of the indicator of
employment in the sector of the region in total, but the average number of employees
Improving the Methodology for Calculating the Index of Growth of Small. . . 337

Table 3 Indicators of variations in SME growth indices, taking into account the direction of the
index
Periods Q1 2020 Q2 2020 Q3 2020
Name type index Indicators indices
Socially prevailing SME growth index 2.8 2.5 2.7
Financially prevailing SME growth index 8.3 5.5 6.4
Current index SME growth 6.9 4.8 5.8
Featured index with financial bias 6.5 4.5 5.2
Recommended index with social bias 4.7 3.5 4.0
Equilibrium index 5.6 3.8 3.8
Including employees according to the SME register
Socially prevailing SME growth index 1.5 0.7 0.1
Financially prevailing SME growth index 8.0 5.0 5.7
Current index SME growth 6.9 4.8 5.8
Featured index with financial bias 5.8 3.6 3.9
Recommended index with social bias 3.7 2.1 2.0
Equilibrium index 4.8 2.9 2.9

per enterprise will only indirectly depend on the regional situation in the labor
economy.
The developed methodology of the SME Growth Index will make it possible to
more correctly differentiate regions, both on a territorial basis and in terms of the
importance of the SME sector in the regional economy, and in this regard, it will be
more objective to take into account the situation for issuing subsidies, subsidies,
recommendations, control points and other tools.

Discussion

In the future, in addition to moving away from the average employment in the sector
as the main social parameter, and the intermediate use of total employment in the
sector, it is also advisable to consider updating the main financial indicator of the
sector, in particular, revenue per 1 SME. In the case of revenue, the problem lies in
the fact that in connection with the measurement in rubles on average per 1 SME:
firstly, there is an inverse relationship with the number of SMEs, as mentioned
above, and secondly, there is no understanding of the money supply as a whole in
sector, i.e. the financial targets of the nat are not related in any way. Projects (the
share of SMEs in total exports and the share of SMEs in GDP) with indicators,
thirdly, due to inflation and a decrease in the purchasing power of the ruble, the data
will always be overestimated, let’s say hyperinflation will throw the index up,
although this will have a devastating effect on the legal sector of SMEs. The
fundamental meaning of the SME Growth Index is being lost. We find that the
main solution at the initial stage is to correct the overestimation of the ruble values,
338 E. V. Yaluner et al.

9,0
8,0
7,0
6,0
5,0
4,0
3,0
2,0
1,0
0,0
1st quarter of the year 2020 2st quarter of the year 2020 3st quarter of the year 2020

current increase index

social bias recommend index
growth index socially prevailing
fearured index (financial bias)
equilibrium index
uniform index

Fig. 1 Graph of indicators of variation in the SME growth index, taking into account the number of
employees per 1 SME subject (for the period, people)

while adopting the remaining recommendations, the total money supply will be
taken into account through the product of the number of sector entities and the
average revenue per 1 SME, which is not accurate, but will reflect the overall
financial significance, and the inverse relationship from the number of subjects of
the sector will also disappear due to the study of the total money supply and the
number of subjects themselves.
Improving the methodology for calculating the index of growth of small and
medium-sized businesses. As can be seen from Fig. 1, the current SME Growth
Index is always in the range between the Recommended Financial Index and the
Financial SME Growth Index, which indicates the insufficient social focus of the
methodology for calculating the SME Growth Index today.

Conclusion

Thus, based on the general idea of filling the index with a minimum set of necessary
indicators that demonstrate both a holistic sectoral and individual growth dynamics
of SMEs, we have developed the following set of recommendations for updating and
practical orientation of the SME Growth Index:
– Modify the calculation methodology from taking into account only the individual
growth prospects of SMEs, to taking into account the overall growth prospects for
the entire SME sector by taking into account the general indicators of the number
of employees in the sector and the number of entities in the sector and the
Improving the Methodology for Calculating the Index of Growth of Small. . . 339

individual growth prospects of specific SMEs by taking into account revenue per
1 SME and payroll for 1 person in accordance with the proposed method.
– Change the methodology for accounting for employees in the SME sector from
the average per SME to accounting for the total number of employees in the
industry, with subsequent differentiation into regional clusters and industry
clusters.
– Change the share of significance of social indicators (the number of employees
and the number of subjects) to correctly reflect the social significance of the SME
Growth Index. Even equilibrium significance coefficients will give a more
socially significant result if the indicators are correctly calculated.
– In fact, in our opinion, the exact weights of the significance of indicators can be
refined as they correlate with other macroeconomic indicators and the goals of
national projects.
– Use weighted averages across groups and the aggregate index. That is, to corelate
the significance of growth indicators in the sample with gross indicators, since the
Altai Territory, which has grown by 50 points (according to data for the third
quarter of 2020), is unlikely to make up a significant share in the aggregate and
even group index, and the gross indicators of St. as well as its market size, after
all, they are not comparable with Moscow. The arithmetic mean calculation in
this case is not correct and distorts the state of affairs in the sector.
– Use purchasing power data or recommended deflators to more fully reflect the
real significance of financial indicators, otherwise, even with really negative
trends, the index will be positive.

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Transformation of Electricity Markets
in the Eurasian Economic Union Member
States: Problems and Prospects
of Liberalization

Vahe Davtyan , Ylia Valeeva , Gulnara Valeeva , and Maria Vaganova

Introduction

The need to study energy integration process in the EAEU is determined by a

complex of problems in the national energy systems of the Union member states
that impede the implementation of a policy of full integration. In this regard, the
problems of different level of development of energy systems, different models of
functioning of national energy markets, tendencies of protectionism, etc. are of
particular importance. Overcoming these problems is a key challenge for Eurasian
energy integration, the analysis of which is of great scientific and practical interest.
Section XX “Energy” is one of the main components of the Treaty on the
Eurasian Economic Union (Lukmanova et al., 2020). It states that the formation of
common markets for energy resources will eliminate barriers to mutual trade in
them, contribute to the creation of equal conditions for business entities of the
member states and increase the volume of mutually beneficial supplies of these
resources. The section “Energy” includes Articles 79-85, which regulate issues
such as:
– interaction of the member states in energy;
– indicative (forecast) balances of gas, oil and oil products;

V. Davtyan (✉)
Russian-Armenian University, Yerevan, Armenia
Y. Valeeva
Kazan State Power Engineering University, Kazan, Russian Federation
G. Valeeva
Kazan State Agrarian University, Kazan, Russian Federation
M. Vaganova
Kazan Federal University, Kazan, Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 341
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_30
342 V. Davtyan et al.

– formation of a common electricity market of the Union;

– ensuring access to the services of natural monopoly entities in the electricity
industry;
– formation of a common gas market of the Union and provision of access to
services of natural monopoly entities in the gas transportation;
– formation of common markets for oil and oil products of the Union and provision
of access to services of subjects of natural monopolies in the transportation of oil
and oil products (Lukmanova et al., 2020).
Among the basic principles for the formation of a common market are the market
pricing, development of competition, elimination of technical and administrative
obstacles to energy integration, development of transport infrastructures of the
common market, creation of favorable conditions for attracting investments, harmo-
nization of national norms and rules for the functioning of energy systems (Setiawan
& Asvial, 2016).
Thus, one of the key goals of the Eurasian economic integration is the formation
of a common market for electricity, natural gas and oil and oil products. Each of the
above areas is regulated within the framework of a separate software package of
systemic activities aimed at ensuring the integration process.

Materials and Methods

The research methodology is based on an integrated approach, including the study of

international practice of ensuring energy security and identification of the degree of
influence of integration processes on it (Pamitran et al., 2015). The study uses a
structural-functional method, as well as a comparative analysis method in order to
identify the features of the national electricity markets of the EAEU member states.
By comparing the indicators of the electric power markets of the EAEU member
states, the study reveals the basic problems of integration. Methods of statistical and
systemic analysis are also used in the research.

Results and Discussion

The results of the study revealed that the key problem of electric power integration in
the EAEU is the energy surplus of its member countries. This is considered in the
context of the export-oriented energy policy of the member countries, which creates
obstacles to the full integration of markets through the intensification of export-
import operations between the participants of the integration project.
At the same time, it was found out that this circumstance has a negative impact on
the process of liberalization of the national electricity markets, which takes place in
an uneven and unsynchronized way. As a result, the EAEU member states
Transformation of Electricity Markets in the Eurasian Economic. . . 343

Table 1 Data on the length of power transmission lines (220 kV and above) of the EAEU member
states (thousand km)
Index Armenia Belaurs Kazakhstan Kyrgyzstan Russia EAEU
PL 1.44 7.0 24.5 2.3 130.0 165.24

demonstrate protectionism in their energy policy, which contradicts the principles of

liberalization. Drawing upon the example of Armenia, it was revealed that the main
risk stemmed from the liberalization of the national market is the weakening of
positions in the regional market due to the policy of importing cheaper electricity
from external markets.
Determination of the main indicators of economic growth is a key research
question. Many scientists agree that one of the drivers of economic development is
interregional interaction (Kozonogova et al., 2020).
Challenges of Electricity Integration
The electricity systems of the EAEU member states are an important branch of
integration formed during the Soviet era, with the collapse of which the electricity
sector found itself in crisis. In the presence of high-voltage power transmission lines
connecting the former Soviet republics, the existence of a number of geopolitical
contradictions did not allow to use the infrastructure potential inherited from the
USSR to the required extent. Today, the EAEU member states have a diversified
system of power transmission lines (Gibadullin & Pulyaeva, 2019) (Table 1).
The tasks of the common electricity market of the EAEU include building
relationships between sellers and buyers from different member states of the
Union. At the same time, there is a surplus of electricity in the EAEU. According
to the data for 2018, with a total consumption of about 1.237 billion kWh of
electricity, its total production by the member states amounted to more than 1.260
billion kWh (86.6% was generated in the Russian Federation and 8.5%—in the
Republic of Kazakhstan) (Gibadullin, 2018).
The installed generating capacity of the EAEU (290 GW) has a potential to
in-crease the volume of electricity generation. The presented data indicate that the
EAEU power industry is able to meet the growing needs of the member states with
the development of long-term export strategies having a potential to stabilize
electricity prices in the internal markets of the member states.
The basic indicators of the EAEU electric power industry are shown below
(Table 2) (Gibadullin & Pulyaeva, 2019).
The common electricity market of the member states is a system of relations
between the subjects of the internal electricity markets of the member states,
associated with the sale and purchase of electrical energy (capacity) and related
services, acting on the basis of general rules and relevant agreements. The Eurasian
Economic Commission (EEC) identifies the following principles for the functioning
of a common market:
– cooperation on the basis of equality, mutual benefit and non-economic harm to
any of the member states;
344 V. Davtyan et al.

Table 2 Indicators of the EAEU electric power industry

Index Armenia Belarus Kazakhstan Kyrgyzstan Russia EAEU
Installed capacity, GW 3.3 9.8 22.0 3.6 244.1 282.8
Generation, billion kWh 7.31 33.31 94.0 12.84 1071.64 1219.10
Consumption, billion 6.36 36.33 92.3 12.97 1054.32 1202.28
kWh
Export, billion kWh 1.22 0.16 3.10 0.20 20.48 25.16
Import, billion kWh 0.27 3.18 1.40 0.33 3.16 8.34

– maintaining a balance of economic interests of producers and consumers of

electrical energy;
– stage-by-stage harmonization of the legislation of the member states in the field of
the electric power industry, including in terms of information disclosure;
– priority use of mechanisms based on market relations and fair competition in
competitive activities;
– unimpeded access to the services of natural monopoly entities in the electric
power industry, etc. (Gibadullin, 2018).
At present, the EEC is consistently working on the formation of a common electric
power market, which implies ensuring access to mutual trade in electricity for all
wholesalers and buyers. This will allow power plants to increase their sales market,
and large consumers to purchase electricity at a lower price from EAEU partners. In
addition to trading under bilateral contracts, it is planned to organize centralized
exchange trading in electricity at existing spots in Russia and Kazakhstan.
To launch a common electricity market, in accordance with the Treaty on the
Union, it is necessary to initiate stage-by-stage formation of the regulatory frame-
work, including the relevant concept and program, as well as the conclusion of an
international treaty within the Union, which entered into force in 2019 (Gibadullin,
2018).
On May 29, 2019, in Nur-Sultan, the heads of the EAEU countries signed an
international agreement on the common electricity market within the Union. The
document includes a protocol on the common electricity market of the EAEU (a new
version of Appendix No. 21 to the Treaty on the EAEU), which defines the legal
basis for the formation and functioning of the common electric power market. The
document defines the methods of trade in electricity, establishes requirements for
ensuring its interstate transmission and access to the services of natural monopoly
entities in the field of electricity in the common electricity market of the Union, their
regulation and control of activities. The Protocol on the Electricity Market defines
the stages of development of the common electricity market of the EAEU—in the
period before the creation of the common gas market (from January 1, 2025) and
after its creation (Rodionova et al., 2020).
For the full functioning of the common electricity market, the member countries
of the Union need to prepare and approve a package of documents. In particular,
Transformation of Electricity Markets in the Eurasian Economic. . . 345

Table 3 Mutual trade in electricity between the EAEU member states

Export/import, billion kWh Armenia Belarus Kazakhstan Kyrgyzstan Russia EAEU
Armenia – – – – – 0
Belarus – – – – 3.18 3.18
Kazakhstan – – – 0.2 1.13 1.33
Kyrgyzstan – – 0.33 – – 0.33
Russia – – 2.77 – – 2.77
Total 0 0 3.1 0.2 4.31 7.61

there are four rules for the functioning of the common electric power market of the
Union, regulating the following issues:
– electricity trade;
– interstate transmission of electricity;
– distribution of the throughput of interstate power transmission lines;
– exchange of information on the common electricity market of the EAEU.
Turning to the indicators of mutual trade in electricity between the EAEU member
states, it should be noted that Armenia is practically out of this process (Table 3)
(Gibadullin & Pulyaeva, 2019).
The construction of the North-South electricity corridor (Iran-Armenia-
Georgia-Russia) will provide Armenia with an opportunity to enter the Russian
electricity market. In general, breaking the energy blockade through Eurasian inte-
gration is the main challenge for the Armenian economy. In this regard, it is
necessary not only to pursue an active policy aimed at the construction of new
infrastructures, but also to apply market mechanisms to ensure a low cost of
electricity produced (Davtyan, 2018).
Liberalization of Electricity Markets
One of the most important questions arising in the implementation of the policy of
energy market liberalization is how radical it is to separate generation from electric-
ity transmission and distribution.
As noted by V.V. Kudryaviy, the real outcome of the reforms in the electric
power industry in Russia was the following threats to energy security:
– decrease in the capacity of management in the center and at the local level;
– collapse of the maintenance system;
– massive use of non-localized foreign equipment;
– loss of responsibility for the reliability of power supply;
– appointment by the first managers of “managers” who do not have technological
competencies and experience of successful work, etc. (Kudryaviy, 2015).
In Kazakhstan and Kyrgyzstan, liberalization is generally formal in nature: genera-
tion is separated from transmission and distribution. Meanwhile, the assets of energy
companies, although divided, continue to be controlled by the state, which is the
346 V. Davtyan et al.

result of the acquisition of energy assets by companies with state equity

participation.
In turn, Belarus is in no hurry to liberalize its energy market. This is associated,
firstly, with the upcoming launch of the BelNPP, which will fundamentally change
the structure of the energy system and the market (Kamecko et al., 2021), and,
secondly, with more than once voiced position on the advisability of forming a
common gas market and only then—the electricity market. This approach seems to
us quite reasonable, also proceeding from the interests of Armenia, which provides
more than 40% of electricity generation at thermal power plants operating on natural
gas imported from Russia.
The liberalization process in Armenia, launched in 2017, faces many problems in
the electricity sector, most of which boil down to a large credit burden and high cost
of generated electricity. In general, the main obstacle to the formation of a common
EAEU energy market is the lack of a common vision of national markets liberaliza-
tion among the member states—an important condition for the implementation of the
integration project.
Let us also turn to some conceptual problems of energy integration in the EAEU.
There are two main models of integration: regulated and liberal. In case of regulated
model of integration, we usually deal with an unchanging structure of the internal
market, often extremely monopolized, whereas in case of the liberal integration
model, we are talking about the openness of the internal market for new participants,
freedom of competition, etc. It is obvious that in the Eurasian context we will
inevitably deal with regulated integration, which is used, for example, in the South
American gas market (Avila-Lopez et al., 2019). Here we face no problem that could
call into question the integration process as a whole. However, finding a compromise
model seems to be extremely important in order to ensure a positive impact of
integration on the revitalization of domestic markets. This is also important given the
fact that the program provides for the stimulation of investment activities in the
industry.
The main characteristic of the EAEU electricity markets is energy surplus and,
consequently, the export orientation of most of the member countries. With the
excess generation capacities, they seek to find foreign markets, often using protec-
tionist methods to promote their energy interests. The latter directly contradicts the
basic principle of the formation of a common electricity market—the liberalization
of national markets. Liberalization concerns not only the internal structure of the
market, the rules of its functioning, but also export-import operations. In this sense,
not all members of the Union are ready to “open their gates” for external suppliers,
including the EAEU partners.
In 2019, the total electricity generation in the EAEU exceeded 1.2 trillion kWh.
As for the volume of mutual trade, until 2018, it reached about 10 billion kWh, but
this figure decreased significantly due to the termination of the import of electricity
from Russia by Belarus in 2018 (imports amounted to about 3 billion kWh annually)
(Lukmanova et al., 2020; Gibadullin & Pulyaeva, 2019; Gibadullin, 2018).
It is also necessary to address separately the main characteristics of the electricity
systems of the EAEU member states.
Transformation of Electricity Markets in the Eurasian Economic. . . 347

Russia: In 2020, the installed capacity of power plants of the United Electricity
Networks of Russia amounted to 246.342.5 MW. Electricity consumption and
generation has been growing over the past 10 years. In 2019, generation increased
by 0.9% compared to 2018—up to 1.080.6 billion kWh, consumption increased by
0.4% and amounted to 1.059.4 billion kWh. Electric power surplus in Russia,
according to various estimates, ranges from 20 to 30 GW (Saneev et al., 2020).
Belarus: The installed capacity of generating facilities in Belarus is
10.073.99 MW. The country’s electricity consumption is 38 billion kWh per year.
It is expected that after the launch of the second unit of the BelNPP, electricity
generation in Belarus will increase by 18 billion kWh, which opens up great
opportunities for export (Kamecko et al., 2021).
Kazakhstan. As of 2021, the total installed capacity of power plants in Kazakh-
stan is 23.621.6 MW, and the available capacity is 20.078.6 MW. The volume of
electricity production reaches 106 billion kWh. At the same time, Kazakhstan is a net
exporter of electricity; the excess generation reaches 5 billion kWh (Mukatov &
Khabibullin, 2018).
Armenia. Armenia has a surplus generation capacity: out of the installed capacity
of 2.885 MW, about 2000 MW are used today. Annual electricity production in
Armenia is about 7 billion kWh, up to 1.5 billion kWh exported to Iran. Currently,
the construction of the third high-voltage power transmission line Iran-Armenia is
underway, which will increase the mutual flows between the countries from the
current 350 MW to 1200 MW. In its turn, this power line is part of the North-South
international electric power corridor project, the implementation of which may in the
future ensure the country’s position in international, including Eurasian, electric
power markets (Markarov & Davtyan, 2020).
Kyrgyzstan: The installed capacity of power plants in Kyrgyzstan is 3.892 MW:
862 MW are thermal power plants, and 3.030 MW are hydroelectric power plants.
Annual generation in Kyrgyzstan is about 15 billion kWh. Currently, the country is
struggling to provide electricity to the domestic market, although, according to the
CASA-1000 program (a USAID-funded electricity transmission project in Central
and South Asia), it is planned that starting from 2023, Kyrgyzstan, together with
Tajikistan, will supply electricity to Pakistan and Afghanistan. In particular, the
supplies are planned to be carried out during the summer period, when the country
experiences an electricity surplus (Mehta et al., 2021).
Thus, almost all EAEU member states are aimed at developing export strategies.
At the same time, taking into account the availability of the necessary generation
capacity, as well as favorable geographical location, Russia, Belarus and Kazakhstan
have the greatest potential to activate exports.
As for Armenia, it is in a post-war shock, and the regional geo-economic
architecture does not allow for a full-fledged diversification of export routes. More-
over, due to problems with export (caused primarily by the slow pace of implemen-
tation of the above-mentioned Iran-Armenia power transmission line project), the
operation of one of the key energy facilities, the fifth power unit of the Hrazdan TPP
(480 MW), has been stopped.
348 V. Davtyan et al.

As regards Kyrgyzstan, two key problems should be noted. First, a colossal debt
has been accumulated in country’s energy system, which has reached $15 billion
over the past 15 years. This affects the tariff policy, which causes significant damage
to the investment climate of the system. Secondly, currently in the energy system of
Kyrgyzstan there is a high depreciation of fixed assets, which reaches 60% (World
Bank, 2017).
On Some Risks of Liberalization in Armenia
Today, the Armenian electricity market is based on a “single buyer-seller” model,
introduced in 2004. According to this model, the right to purchase electricity from
producers and to sell it to consumers on the wholesale market remains with holding a
distribution license.
In 2017, the government of Armenia approved a program for the liberalization of
the Armenian electricity market, which was also dictated by the prospects for
connecting to the common energy markets of the Eurasian Economic Union (Gov-
ernment of the Republic of Armenia, 2017). On February 7, 2018, the National
Assembly of Armenia amended the Law on Energy. The amendments provide for
the liberalization of country’s electricity market.
The aim of the program is to improve the efficiency of the domestic market and
promote exports. The program provides for the creation of mechanisms for the
export of the entire volume of electricity unclaimed in the domestic market, subject
to the synchronization of the rules of interstate trade with neighboring countries. It is
expected that this may lead to the formation of a competitive environment in the
domestic market, which can be mainly achieved through the formation of the
institution of electric power traders. The latter will purchase electricity from pro-
ducers and sell it to consumers, paying the “Electric Networks of Armenia” (ENA)
CJSC a margin for distribution services. At the same time, in distribution, the ENA
monopoly will retain. It is assumed that this will not lead to an increase in domestic
tariffs, since the company will actually be freed from supply costs. Distribution costs
will be borne by the ESA, with the cost of delivery being borne by the traders
themselves.
The program provides for the creation of a market operator that will act as the
main institution responsible for electricity trading. Within the framework of the new
model, it is planned to form an electronic exchange. At the exchange, a qualified
consumer will be able to purchase electricity on an unregulated market at a free price
if he needs volumes exceeding those anticipated (Government of the Republic of
Armenia, 2017).
Market liberalization will allow the country to pursue a socially oriented tariff
policy by introducing night and day tariffs. Seasonal, peak or nightly busy times will
also be considered for the purpose of setting new rates.
It is also important to highlight the potential risks and threats emanating from the
model of liberalization of the Armenian electricity market.
The reforms envisage free entry of large producers into the market, providing an
opportunity to supply cheap electricity to Armenia. The main risk here is that
Armenia, being a country with excess generating capacities, will gradually reduce
Transformation of Electricity Markets in the Eurasian Economic. . . 349

export volumes with an increase in the share of imported (mainly Georgian) elec-
tricity on the domestic market. An increase in the share of electricity produced in
Georgia on the market in Armenia can be facilitated by the low cost of Georgian
generation, which is provided mainly due to the intensive development of hydro-
power (Markarov & Davtyan, 2020).
This tendency fundamentally contradicts the basic model of ensuring Armenia’s
energy security, built on the principle of increasing exports to foreign markets, the
weakening of positions in which will inevitably lead to the loss of a geostrategic
regional resource. Consequently, the problems of regulation of the electric power
market in Armenia should be considered not only from a purely commercial, but also
from a geopolitical standpoint.

Conclusion

One of the key goals of the Eurasian economic integration is the formation of a
common market for electricity, natural gas, oil and oil products. Each of these areas
is a separate software package of systemic activities aimed at ensuring the integra-
tion process. A key component of energy integration in the EAEU is the liberaliza-
tion of electricity markets, which is necessary for the formation of a common
electricity market by 2025. The main obstacle to the formation of a common
EAEU electricity market is the lack of a common vision of liberalization of national
markets among the member states. A key obstacle to integration is also a set of
disagreements in bilateral relations between some EAEU members as well as the use
of protectionist methods for promoting national energy interests. At the same time,
the surplus power capacity is the main characteristic of member states’ national
markets which creates additional problems for integration project.

Acknowledgments The work was supported by the Science Committee of Republic of Armenia in
the frames of the research project № 21 T-2H107.

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The Contribution of Ecological and Medical
Tourism to Sustainable Development Based
on the Potential of Radon Water Springs
in the Leningrad Region

Artur V. Sauts , Pavel V. Zhukov, and Svetlana V. Eregina

Introduction

Medical tourism is strongly linked to health, longevity, quality of life and social and
economic prosperity, as it combines the meeting of emotional and cultural needs and
has a healing effect on the human body in the most rational way. In addition, with the
rational organisation of tourism activities, medical and ecological tourism become
one of the most sustainable forms of tourism. The development of said types of
tourism undoubtedly has a positive impact on social and economic prosperity while
minimising negative environmental impacts.
Tourists looking for a health spa treatment or enjoying the beautiful scenery of
natural monuments, ecological trails or historical buildings and facilities can expose
their bodies to both the positive and negative effects of radioactive radon gas. Radon,
or more precisely radon isotope 222, is a chemically inert gas. Naturally, it is found
in soil and can be released into the atmosphere in large quantities during seismic
activity (D’Incecco et al., 2021). Radon is 7 times heavier than air and therefore
accumulates mainly in low-lying areas. The main sites of ecological tourism, where

A. V. Sauts (✉)
Saint Petersburg State Chemical and Pharmaceutical University of the Ministry of Healthcare of
the Russian Federation, St. Petersburg, Russian Federation
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
P. V. Zhukov
Saint-Petersburg University of Management Technologies and Economics, St. Petersburg,
Russian Federation
LLC «Terra», St. Petersburg, Russian Federation
S. V. Eregina
Vologda State University, Vologda, Russian Federation

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 351
A. Rumyantseva et al. (eds.), Finance, Economics, and Industry for Sustainable
Development, Springer Proceedings in Business and Economics,
https://doi.org/10.1007/978-3-031-30498-9_31
352 A. V. Sauts et al.

it is possible to get radon irradiation, are natural valleys, water reservoirs, adits,
man-made objects made of radioactive rocks. As for medical tourism, these are the
health resorts with radon baths, which gained popularity in the twentieth century.
The biological effect of radon exposure is related to the absorption of alpha
radiation, which triggers a chain of physiological reactions. Twenty minutes later,
half of the amount of radiation received is released, and after a few hours radon will
have completely dissipated from the body. Thus, low doses of radiation are both safe
and have a stimulating effect on the body (Puchkov et al., 2022:8). At the same time,
radon can be hazardous to health and, in large quantities, to life and it is also one of
the main sources of ionizing radiation in buildings (Frutos et al., 2021:6). Once in the
human body, radon causes radiation microscopic thermal tissue damage and can
result in lung cancer (Somsunun et al., 2022:4).
It should also be noted that the tourism industry is adversely affected by the fear,
mistrust and lack of necessary radioecological knowledge of potential tourists and
tourism workers, which deprives them of the opportunity to receive appropriate
medical services or to enjoy a radiation-hazardous natural or architectural
monument.
The Leningrad region is a territory of the Russian Federation rich in natural and
man-made radon sources, the rational use of which will contribute significantly to
the development of tourism and health care, which are an integral part of the
sustainable development of the state.
The objective of this work is to conduct an analytical review of natural sources of
radon, followed by an assessment of their potential, the disclosure of which offers
prospects for the development of medical and ecological tourism in the Leningrad
region.

Materials and Methods

The study was based on information from the media, geographic information
systems and medical statistics. The methodological basis of the study is the com-
parative, socio-ecological and semiotic analysis of development trends in tourism
and natural radon sources, the use of which makes it possible to assess the current
situation and identify relevant trends in the area under study.

Results and Discussion

One of the most prominent places with a natural radon source is the rural settlement
of Lopukhinskoye, located in the Lomonosov municipal district of Leningrad region.
The settlement has a well-developed network of paved roads that provide access to
various parts of St. Petersburg. The administrative centre of the Lopukhinskoye
Rural Settlement is the village of Lopukhinka, which includes many historic villages
The Contribution of Ecological and Medical Tourism to. . . 353

dating back to the founding of St. Petersburg. Almost all of them have preserved on
their territories the ancient estates of the royal nobility, as well as people
of creativity, art and science. For instance, just nine kilometres from the village of
Lopukhinka there are the ruins of the Ust-Ruditsa estate, the residence of
M.V. Lomonosov, where the glass and smalt factory was located. The estate
buildings are no longer extant and the garden is in disrepair, but students from St
Petersburg universities regularly come here for internships and care of cultivated
trees, indicating the area’s involvement as a location for scientific and ecological
tourism.
Lopukhinskoye settlement occupies 270 km2 of the entire area of the Lomonosov
district. The total resident population here as of January 1, 2017 is 2996 people, most
of the citizens, approximately 75%, are of working age.
On the territory of the settlement there is a unique natural monument—
Lopukhinskoye radon lake. In fact, this is a group of several small artificial lakes.
They were formed in the nineteenth century, when the river of Lopukhinka was
blocked by a dam. The length of the upper lake is about 200 m, the lower one is
550 m, the width of the lakes is 40–60 m. The lakes are fed with water from springs
flowing from fractured Ordovician limestones. The hydrocarbonate waters of the
springs are enriched with colorless radon (Ivanov & Belyakov, 2010:4).
As mentioned above, radon in moderate doses gives a healing effect, therefore,
back in the 30s. Nineteenth century on the basis of radon water springs, a small
hydropathic facility for sailors operated, founded by the famous navigator
F.F. Bellingshausen together with the famous surgeon N.I. Pirogov. In those days,
this place was called “Russian Switzerland”. The fauna of the natural monument is
well represented by a whole complex of species, the distribution of which in our
region is closely related to broad-leaved forests or to forests with a significant
admixture of broad-leaved species. These include the tawny owl, red-breasted
flycatcher, marsh tit, Eurasian nuthatch and hawfinch. The area of the natural
monument is 16.0 km2. Importantly, this nature park has a well-maintained ecolog-
ical path. Here, in Soviet times, it was decided to conduct an experiment and a trout
farm was set up near the Radon lakes, the products of which may be of interest to
potential tourists.
In addition to the radon water springs, the settlement has the accompanying
elements of ecological tourism—flora and fauna. On the eastern border of the
settlement there is a botanical wildlife reserve called “Gostilitzky”. It should be
noted that on the territory of the Lopukhinsky settlement there is a smaller protected
area, most of the Reserve is located on the territory of the neighboring Gostilitsky
settlement, within the Ordovician plateau. Here, on rendzina soils, so-called “com-
plex spruce forests” are developed, which are rare for the Leningrad region. Along
with spruce, broad-leaved species grow here—linden, maple, and hazel in
the undergrowth. There are no water bodies on the territory of the reserve, but in
the protected zone there are the sources of several rivers and streams, including the
Rudica River. In the central part of the reserve there is a bog massif, which is a
system of swamps, located in flat depressions, separated from each other by narrow
ridges, sometimes they are connected to each other by ridges. Low twisted pines
354 A. V. Sauts et al.

grow over its entire area, along the outskirts—birches. These bogs are especially
beautiful when cottongrass bears fruit and covers them with a continuous carpet.
Swamps in other parts of the Reserve occupy insignificant areas. The mezereum can
be found in the reserve. All parts of the plant are poisonous, but it blooms very
beautifully, usually in early spring, when the leaves have not yet blossomed. Early
flowering plants also include lungwort and liverwort also grow here. The annotated
list of plants includes 314 species belonging to 63 families. In the flora of the
Gostilitzky reserve, 2 species were identified, included in the “Red Data Book of
the Russian Federation (plants and fungi)” (2008) and in the “Red Data Book of the
Leningrad Region (plants and fungi)” (2000)—a Cypripedium calceolus and a
Dactylorhiza baltica. Birds are the most noticeable and quantitatively predominant
component of the fauna of the Gostilitzky Reserve. A large number of protected bird
species have been identified here. For example, the white stork uses the agricultural
land adjacent to the reserve for food. A pair of white storks was noted on freshly cut
fields in the vicinity of the village of Zaostrovie near the southern border of the
reserve. The annotated list of birds includes 106 species inhabiting the territory of the
reserve and immediately near its borders. The area of the natural monument is
1599 ha.
The unique eco-village “Khutor near Izvara” is located near major natural
attractions. As at 2018, 90% of the lots there are sold out, and 70% of them are
built up with houses. “Khutor near Izvara” is, first and foremost, the ideology of a
healthy lifestyle, as well as the return of the traditions of strong families and family
estates, good neighborly relations. The location was not chosen by chance. The
company has long begun to study the experience of foreign colleagues in the field of
building eco-friendly housing, intending to launch a new product for the Russian
market—eco-villages.
A large complex “SOVA Skazka WEST” operates on the territory of the village,
specializing in leasing eco-friendly cottages in the barn-house style.
In order to popularize radon water springs and the natural monument “Radon
water springs and lakes of the village of Lopukhinka”, the regional branch of the
Russian Society of Nature Conservation and the Directorate of Protected Areas of
the Leningrad region developed the updated eco-route. The objective of the project is
to introduce the concept of radon sources into tourism circulation with an emphasis
on the health-improving effect on the one hand and as a counterpoint to the negative
factors that radon carries in urban areas.
Thus, the formed route allows you to reveal the recreational opportunities of the
region, where the main emphasis is on radon sources, which in a small amount have
a healing effect on the body. At the same time, an increase in the concentration of
radon has a negative and pathological effect on the human body, which is confirmed
by the calculations rearranged in the article.
Another object of ecological tourism is the Sablinsk regional complex natural
monument, located near the village of Ulyanovka, Tosnensky District, Leningrad
region. On the territory of the natural monument, the rivers of Sablinka and Tosna
flow and there are deep canyon-like valleys with rocky outcrops and waterfalls,
ancient mounds. In outcrops of Ordovician platy limestones, there are ancient
The Contribution of Ecological and Medical Tourism to. . . 355

fossils. The canyon of the Sablinka River starts 0.5 km below the Sablinsky waterfall
and goes 1 km downstream to the Tosna River. The depth of the canyon in the
middle part reaches 30 m (Tsuba, 2014:254).
Sablinsky caves are abandoned underground quartz sand mines dating from the
mid-nineteenth century to the early twentieth century. Since the cessation of quartz
mining, collapses and flooding, blockages and secondary gravity cavities began in
the workings, which led to the formation of labyrinths, the passage of which requires
precautions (Skvortsov & Komissarova, 2016:310).
The geological rocks of the section in the area of the Sablinsky natural monument
are naturally radioactive. Mudstones have the highest level of radioactivity in the
studied workings, the value of which is 1200–3000 Bq/kg, which is approximately
10 times higher than the natural level (Lebedev, 2012:32). The level of radon-222 in
the air of the Zhemchuzhnaya cave exceeds the permissible level by approximately
50–88 times (Lebedev & Grebennikov, 2010:37). Being in such places is dangerous
for their health. To ensure the safety and thus unlock the tourism potential of this site,
it is necessary to introduce radiometric control and introduce additional engineering
and technical measures to remove air containing radon, as is done, for example, in
the tourist cave in south-eastern New Mexico in the USA (Anderson et al.,
2021:314) and in the former Kowary uranium mine, the Niedzwiedzia cave, located
near the village of Kletno, Nizhnesilezskoe voivodeship, in south-western Poland
(Olszewski et al., 2005:804).
In addition to the listed natural monuments, there are a large number of bogs in
the Leningrad region, which, even when filled in, have been natural sources of radon
for centuries.
The objects of medical tourism are health resorts with radon baths. Radon baths
are a recognised treatment for musculoskeletal disorders in the former Soviet Union,
and recognition of the technique began to grow in Europe and the USA more than
10 years ago (Erickson, 2007:49). In addition, radon therapy is used in the treatment
of diseases of the cardiovascular, genitourinary system, diseases of the gastrointes-
tinal tract and skin and metabolism (Petrova & Yakovlev, 2018a:13). All of the
diseases mentioned above are typical for residents of the Russian Federation, in
particular the Leningrad region and its bordering regions.
Currently, a number of private clinics and health resorts offer radiotherapy
services in the Leningrad Region, but they use “imported” radon. The creation of
a specialized resort on the territory of Lopukhinskoye Lake, where there is a constant
source of radon and minimal logistics costs, would give a big breakthrough in the
development of medical tourism in the Leningrad Region (Petrova & Yakovlev,
2018b:36). Similar resorts exist in the Stavropol, Krasnodar and Chelyabensk
regions and other regions of the Russian Federation, as well as abroad, for example,
in the city of Dehloran in western Iran (Adelikhah et al., 2020).
The high radioactive danger of radon can make tourists reluctant to visit unique
natural places and self-medicate because of the danger to their health and even life. It
should also be noted that it is problematic to protect yourself from invisible danger
using household dosimeters because they measure gamma rather than alpha radia-
tion, which comes from radon. Radon activity is measured by a special radiometer
356 A. V. Sauts et al.

that registers alpha radiation. The price of a radiometer is several tens of times higher
than the price of a household dosimeter.
It is difficult to judge the activity of radon by the gamma background, because
additional data are required that cannot be obtained with a simple dosimeter (Sautz &
Sautz, 2021:32).

Conclusion

To summarize, the natural radon water springs of the Leningrad Region have great
potential as objects of ecological and medical tourism. Creation of recreational and
anthropogenic facilities on the territories of the listed locations and organisation of
visits to avoid negative impacts on health will serve as a great impetus for the
development of safe ecological tourism. The establishment of medical infrastructure
facilities, in addition to tourism development, will have a positive impact on
the medical and social environment through the treatment of diseases typical for
the residents of the Russian regions, the prevention of technological changes in the
natural radiation background, which will positively influence the sustainable devel-
opment of the North West region. The areas of advertising, promotion and health
education for potential tourists, patients and tourism workers should be noted as
further areas of research.

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