TCFD 201-2

Moscow Exchange Group admits that climate change poses risks to business continuity that may have long-term economic, environmental, and social implications for many sectors of the global economy, society, and the Group companies.

As part of its risk management system, the Group regularly identifies and assesses business risks in terms of their likelihood and expected financial losses. Moscow Exchange continuously monitors the legal environment and introduces international best practices to identify and assess climate risks and incorporate climate-related disclosures in its reporting.

Under the business continuity management system, a list of climate risks is compiled and factored in to strategic and financial planning. Moscow Exchange regularly assesses the impact of climate risks on trade and investment portfolios.

Key processes of the climate risk management system:
  • compilation of a list of risks and opportunities, categorised and prioritised;
  • assessment of the likelihood and impact of the risks identified;
  • scenario analysis of risks and opportunities;
  • updating the heat map of risks;
  • monitoring the implementation of risk mitigation measures.
In line with the TCFD’s recommendations, Moscow Exchange distinguishes two main types of climate risks:
  • physical: risks of extreme weather events, natural and man-made disasters;
  • transition: risks associated with the transition to a lower-carbon economy.

Physical risks involve potentially significant damage to premises and infrastructure, and harm to employees of the Group, its customers and partners, disrupting their businesses and resulting in financial losses that may prove critical.

Transition risks are divided into policy and legal, technology, market, and reputation risks. Each type may have significant financial implications for the Group’s business.

In 2022, the Exchange continued to improve its climate risk assessment model by estimating each risk probability and the expected losses. In order to do that all climate risk were divided into five types: market, policy and legal, reputational, physical, and technology, (see the table "MOEX Group climate-related risks for a detailed description of the types of risks) For all types of climate-related the degree of potential financial impact was determined and events (risks) of small and large magnitude were identified. In addition, two scenarios were used (significant and minor impact events) for financial assessment of risks and opportunities.

Top scenarios for climate risks

The financial costs for addressing climate risks and achieving climate opportunities mainly consist of staff costs for the areas responsible for climate action to some extent. The exceptions are the costs of commissioning contracts for the purchase of electricity from RES, not exceeding RUB 2 million, and the contribution to the share capital of Contour (RUB 66 million), which is responsible for the creation and maintenance of the carbon unit registry.

Integration of Moscow Exchange Group climate-related risks into the risk management system

Climate risks


Probability of small/large-magnitude risk

Response to risk or risk mitigation measures

Physical risks

Acute risks

Floods, snowfalls

Changes in precipitation and extreme variability in weather patterns, including floods with destruction of roads, bridges, power lines, buildings, and other infrastructure, resulting in loss of life or injuries and leading to business shutdown


Disaster recovery strategies include:

  • reconfiguration of systems using hardware that remains stable, enabling restoration of communications after a critical failure;
  • availability and configuration of hot backups to restore major infrastructure applications;
  • mirroring and cold backup of affected location and data recovery.

Freezing rain

Power failures (ice-covered power lines become extremely heavy, causing line supports, insulators, and lines to break). Traffic delays due to icy roads. Potential loss of life or injuries


Hurricanes, storms

Destruction of power lines, residential buildings, and other infrastructure, with loss of life or injuries and leading to business shutdown. Traffic delays


Forest fires

Destruction of property. Release of hazardous chemicals due to wildfires has a significant adverse impact on human health


Employee relocation plan will be rolled out in the event of forest fire emergencies

Chronic risks

Ice-crusted ground

Ice-crusted ground can lead to injury employees and their incapacity


Employees who work in the office, will be recommended to stay at home

Extremely hot weather

Adverse impact on employee health and operability of equipment Lower productivity


Providing a comfortable workplace environment: workplaces in air-conditioned offices will be offered to employees working from home without air-conditioning

Extremely cold weather

Adverse impact on employee health and operability of equipment, resulting in slowdown or shutdown of operations

Above average /Average

Providing a comfortable workplace environment: employees working in the office will be permitted to stay at home.

Employee relocation plan will be rolled out if extremely cold weather is followed by a central heating shutdown

Transition risks

Policy and legal risks

High power costs

Energy prices rising faster than inflation as a result of abrupt transition to zero-carbon power generation


Wider use of energy-efficient equipment

Enhanced emissions-reporting obligations

Additional financial and labour costs to collect information and report greenhouse gas emissions and their reduction

Average/Above average

Establishing carbon reporting procedures, participating in the CDP national and international carbon reporting initiatives. Engaging consultants for carbon reporting

Inaccurate or false emissions disclosures

Fines and reputational damage: this is a developing area with new rules and disclosure standards, such as the TCFD’s Recommendations or the EU SFDR, including at the national level (Russia supports the implementation of new climate-related reporting rules along with requirements introduced this year)

Below average/ Below average

Higher exposure of issuers to litigation.

Increased legal costs and expenses, including court-imposed fines

Below average/ Below average

New requirements for greenhouse gas emissions disclosures hindering placement of securities

Additional costs for maintaining a dedicated database of greenhouse gas emissions and preparing reports. Additional equity placement requirements


Coordination with issuers of changes in listing requirements concerning the reporting in the field of greenhouse gases

Lack of clear regulatory targets for carbon emissions

Multiple possible interpretations of laws and regulations. Increased risk of non-compliance

Below average/ Below average

Technology risks

Costs of transition to lower-emissions technology

Failed investments in new technologies.

Costs of setting up new business processes.

Increased capital expenses for MOEX transitioning to low-carbon technologies.


Options for hedging financial risks associated with depreciation of assets

Power outages and emergencies due to low system resilience

Temporary power outages due to insufficient power storage capacity and lack of upgraded power grid services (resulting from a rapid and widespread transition to renewable energy sources). Power outages are expected to become more common at some point during the transition to lower-carbon technologies


Recovery strategies for a prolonged power outage at a single location include:

  • reconfiguration of systems using hardware that remains stable, enabling restoration if communications after a critical failure;
  • availability and configuration of hot backups to restore major infrastructure applications;
  • mirroring and cold backup of affected location and data recovery

Failed investments in new lower-carbon technologies

Purchase/investment in inefficient new equipment/technologies can necessitate repurchases / investments, taking into account the requirements reduction of emissions

Below average/ Below average

Options for hedging financial risks related to investment in high-risk lower-carbon technologies

Market risks

Refocusing consumers and investors in favour of ESG companies

Shifts in consumer preferences. Reduced demand for services not meeting climate goals due to changes in investor behaviour


Introduction of ESG requirements for issuers and control over their implementation

Lower energy prices as a result of energy transition

Decrease in demand and prices for energy leads to a drop in the income of the exporters and the loss of their capitalisation, which leads to lower commission new income.


Options for hedging financial risks associated with depreciation of assets

Increased tax expenses of issuers (carbon taxes/allowances)

Changes in the terms of carbon taxation, including increased tax rates, may lead to increased tax costs for issuers


Increased power and heating prices due to transition to zero-carbon energy sources

Increased office maintenance costs

Below average/Below average

Switching employees to remote working during winter

New regulations limiting greenhouse gas emissions

Increased costs due to the implementation of emissions purification technologies. Decreased production due to the introduction of emissions targets


Establishing carbon reporting procedures. Participating in national and international carbon reporting initiatives. Engaging consultants for carbon reporting

Share of green energy in the total power costs of companies is not regulated

Lack of a clear vision on the share of green energy may hinder the growth of the carbon market


Partnership development with issuers

Reputational risks

Increased concerns or negative feedback of stakeholders regarding Moscow Exchange’s ESG policy

Lower demand for services and negative impact on workforce management and planning (hiring and retention), resulting in revenue decrease


Establishing carbon reporting procedures. Participating in national and international carbon reporting initiatives. Engaging consultants for carbon reporting

Reduced revenue from decreased demand for services

Increased stakeholder concerns over issuers’ compliance with emissions standards or negative stakeholder feedback. Reduced investor interest due to uncertain market signals

Below average/ Below average

Lower investor interest

Reduction in capital availability for issuers


Selection of instruments for hedging financial risks associated with investing in high-risk low-carbon technologies

Climate-related opportunities of Moscow Exchange

Climate-related opportunities

Probability of small/large magnitude risk

Description of impact indicator

Developing and/or expanding the list of services to issuers (with low emissions)

Below average / below average

Providing additional incentives for issuers with low emissions, leading to an increase in trading turnover for these issuers and increasing income for Moscow Exchange

External incentives to use more efficient types of transport

Average / above average

Reducing the administrative costs of Moscow Exchange

Reducing emissions from employee commuting when working remotely

Above average / high

The development of working from home will mitigate physical climate risks, reduce indirect greenhouse gas emissions (Scope 3) by eliminating the need for employees to travel to work, and reduce the administrative costs of MOEX and by saving electricity and heat consumption to support employee activities in company offices

External incentives to reduce electricity and heat consumption

Above average / high

Reduced office maintenance costs

Implementation of a Sustainable Supply Chain Policy

Below average / average

Incentives for low-emission companies will reduce operating costs and increase profits/capitalisation, which will have a positive impact on trading volume

Incentives to increase market participation, such as tax breaks or regulatory incentives

Below average / average

Development of new services such as climate-related indices, education and training for the market

Above average / high

Creation of services such as the new indices will help to increase revenues from the sale of market data

The development of the market for carbon units

Above average / above average

Developing the carbon market will create a new business segment that can generate revenues on a par with other segments

Recognising the contribution of MOEX to climate protection by society

Below average / below average

Recognising MOEX’s contribution to climate protection will increase trust in the company and attract additional customers

New renewable energy companies going public

Below average / average

Creation and development of new industries will increase company revenues through economic growth in the Russian Federation

ESG consulting

Below average / average

Elaboration of a climate agenda / training / advice for market participants