Resetting Without Schwab: Russia & the Fourth Industrial Revolution
Resetting Without Schwab: Russia &
the Fourth Industrial Revolution
On November 1, 2021, Dmitry Medvedev, deputy chairman of Russiaās Security Council, published an essay outlining six lessons from the COVID-19 pandemic. āCOVID-19 has seriously accelerated the fourth industrial revolution. Since March 2020, there has been an explosion in the quantity and quality of a variety of online services, whether it be grocery delivery, access to government services, virtual cultural events, bank payments, or distance learning,ā Russiaās former president and prime minister wrote. The main problem now facing the world, per Medvedev, was how to avoid a ādigital divideā that would deprive people of āvital opportunities.ā
Medvedev also argued that COVID-19 triggered a āglobal crisis of confidenceā that could be remedied by āgiving the World Health Organization the authority to make significant mobilization decisions in the interests of the entire world community in an emergency situation.ā
Another important lesson from the pandemic was making vaccines accessible, and when deemed necessary, compulsory. Extolling the safety and efficacy of COVID-19 shots, the Russian statesman blamed āvaccine nationalismā for complicating efforts to inject the global population in a timely and cost-efficient manner.
Medvedevās essay provided a remarkably honest overview of Moscowās trajectory from the start of the pandemic until the end of 2021; that it resembled a boilerplate press release from the World Economic Forum was, to put it mildly, somewhat concerning.
But are Medvedevās āsix lessonsā still applicable to Russia today, four months after Moscow launched its special military operation in Ukraine?
Sanctions in response to the conflict in Ukraine forced the World Economic Forum to cut all formal ties with Russian businesses and government institutions: the typical gaggle of Russian oligarchs were disinvited to Davos; Vladimir Putinās profile was purged from the WEFās website; Russiaās Center for the Fourth Industrial Revolution ā founded in partnership with the WEF in October 2021 ā announced in April that it had suspended its operations.
For Russia, divorce with the Davos-devout West represents a rare but narrow window of opportunity to reflect, reimagine, and, by all indications, reset.
But is Moscow taking steps to halt or reverse the Great Reset agenda that has swept the globe following the outbreak of COVID-19? Although no longer rubber stamped by Schwab, Russiaās technocratic revisioning of the social contract between government and citizen continues without any significant interruptions. From CBDCs to experimental genetic āvaccines,ā Moscow is still marching to the same tune being played in Davos.
Rebuild everything
āThe Fourth Industrial Revolution is a new chapter in human development, driven by the increasing availability and interaction of a set of extraordinary technologies, building on three previous technological revolutions ā¦ The worldās most innovative companies, governments and civil society organizations are combining new technologies in new products, services and processes that are reshaping existing ways of delivering value.ā
ā Klaus Schwab, Shaping the Future of the Fourth Industrial Revolution (2018)
On June 2, 2022, Russiaās leading businessmen and top government officials gathered for the Forum for Solving Social Problems. Launched in 2020 as part of President Vladimir Putinās National Social Initiative (NSI), the conferenceās mission of improving social services had taken on new urgency as Russia charted a new course in the wake of Western sanctions and deteriorating geopolitical conditions.
Attendees included Maxim Oreshkin, Assistant to the President of the Russian Federation; Dmitry Peskov, Kremlin spokesman and Special Representative of the President of the Russian Federation for Digital and Technological Development; Alexey Repik, founder of Russian pharmaceutical firm R-Pharm; and Herman Gref, CEO of Sberbank, Russiaās largest bank.
Speaking during the forumās plenary session, billed as āNew Time ā New Challenges: People in the Spotlight,ā Gref argued that technology needed to be harnessed to make Russian businesses and institutions more ācustomer-centricā:
āTo become a customer-centric company, you need to rebuild everything: internal processes and technologies, because without technology it is impossible for a state, a social organization, or a commercial company to be customer-centric. Technology is the key to this world. Is it possible to move the social sphere in this direction? It is not only possible, but necessary.ā
With Russia at a socioeconomic crossroads, the head of Sberbank called for āa complete redesign of processesā in order to remold āthe client path.ā
But what lies behind Grefās impenetrable corporate word salad? What kind of āclient pathā does he have in mind for Russians? To answer these questions, it is first necessary to briefly review the life story of this āvisionaryā banker.
Herman Gref (Hermann GrƤf in his ancestral tongue) was born on February 8, 1964 to German parents who were deported to the Kazakh SSR during World War II. He began working in the St. Petersburg government after finishing law school in 1990 and, by the end of the decade, was on the board of directors of several high profile companies, including state-owned airline Aeroflot and energy giant Gazprom. Gref then followed Vladimir Putin to Moscow, where he was appointed Minister of Economic Development and Trade in 2000.
Seven years later, he was handed the reins of government majority-owned Sberbank.
Perched atop Russiaās largest and most influential bank ā and in control of nearly one third of all assets in the countryās banking sector ā Grefās international stature snowballed. In 2009, he became a member of the World Economic Forumās International Business Council and two years later he was elected to the WEF Board of Trustees. (His profile, in contrast to that of Vladimir Putin, is still visible on the WEFās website.)
In 2012, the Sberbank CEO moderated a panel discussion at the St. Petersburg International Economic Forum called āWay Out from the Management Dead-End: Wisdom of the Crowd or the Authoritarian Genius?ā
The panelists showed a certain squeamishness for āauthoritarianā managerial practices, prompting Gref to liven up the conversation.
āYou are saying terrible things,ā the Sberbank CEO playfully scolded them. āYou are proposing an actual transfer of power into the hands of the populationā¦ If each person can participate directly in management, then what are we managing?ā
Citing Confucius and Kabbalah mysticism, he reminded his audience of the millennia-old tradition of shielding the truth from the easily excitable masses.
āPeople donāt want to be manipulated when they have knowledge. What does it mean to remove the veil from the eyes of millions of people and make them self-sufficient? How do you manage them? Any mass management implies an element of manipulation,ā Gref concluded.
His comments were treated as scandalous by the Russian press, but the banker insisted his remarks were only meant to stimulate discussion, telling one interviewer that he ālaughed heartilyā when he learned so many people had taken offense.
The incident was soon forgotten, and a year later, in 2013, Gref was made a member of the international board of JP Morgan Chase, replacing Anatoly Chubais ā the architect of post-Soviet privatization in Russia.
That same year, the Sberbank CEO penned the forward to Scenarios for the Russian Federation, a report published by the World Economic Forum. According to Gref, the document attempted to take āa structural view of the key uncertainties, risks, challenges and development opportunities for the Russian Federation in the near future.ā Klaus Schwab, founder and chairman of the WEF, expressed hope that the report would ālay the groundwork for more productive conversations between all stakeholders in the Russian economy.ā
The report was just one of many fruitful collaborations between Schwab and Gref. In 2016, the CEO of Sberbank had the honor of authoring the preface to the Russian-language edition of Schwabās The Fourth Industrial Revolution:
āThe fourth industrial revolution will have a dramatic impact on the entire structure of the world economy, and if we want to be among its leaders, we must understand what direction technological development will take in the coming years, and what breakthrough innovations await us in the future.
Klaus Schwab, who wrote the book The Fourth Industrial Revolution, is the President of the World Economic Forum in Davos and therefore is in a unique position to summarize the experience and views of the worldās leading experts in the field of economics and technology ā¦ā
To Grefās credit, he practiced what he preached. In a December 2017 article marking his tenth year as head of Sberbank, Vedomosti (Russiaās equivalent of the Wall Street Journal) highlighted Grefās obsession with technological development ā to the point where the bankās upper management struggled to keep up with him.
āI have a typical perfectionist profile. Perfectionism is a mental illness, and you try to do everything as flawlessly as possible all the time, even though itās not optimal, and itās not necessary,ā Gref was quoted as admitting.
It would take several more years of hard work ā and the arrival of COVID-19 ā before the Sberbank CEO would be able to realize his vision of the ideal āclient path.ā As Schwab prophetically declared in the early months of 2020, āthe pandemic represents a rare but narrow window of opportunity to reflect, reimagine, and reset our world.ā
Gref seized on this opportunity to āreset.ā On Sep 24, 2020, Sberbank announced it was no longer a mere financial institution, but instead āa whole universe of services for human life and businesses.ā The bank declared it would henceforth be known as Sber, āa new brand for our new role in human lives.ā
The Sber umbrella would cover all aspects of life. Russians would now have access to services such as SberMarket, SberHealth, SberGames, SberAuto, SberFood, SberSound, and the key to unlocking them all, SberID.
A feature published by TASS described the Sber future that awaited Russians:
āZhenya goes to work using Citydrive carsharing, orders lunch using Delivery Club, calls a taxi at 17:59, reads Gazeta.ru on the way home, and in the evening watches a movie on Okko [a Russian streaming service] and for dinner has a meal he cooked from groceries delivered from SberMarket. He does all this ā¦ through a single SberID login system.
This is what the digital ecosystem looks like, the latest stage in Sberās development ā¦ In the future, it is this ecosystem that will be the basis for integrating the interests of people, business, and the state as a whole. [ā¦]
For the ordinary user, SberID provides access to a large number of non-banking services in this ecosystem that simplify shopping, health care, entertainment, job search ā that make life more comfortable in general.ā
Participation in Sberbankās digital āuniverseā is not compulsory ā at least not yet.
However, Gref already exerts inescapable influence over Russia. Quietly and methodically, Russiaās leading disciple of the fourth industrial revolution has introduced a range of āservicesā that are practically impossible to opt out of. There is only one āclient pathā, and Gref has designed it to be non-optional sooner rather than later.
The Sberbank CEO has created a āparallel world in which he is the president,ā Tsargrad, a leading conservative broadcaster in Russia, complained in January 2021.
Digital currencies
āBy the 2030s, versions of distributed ledger technologies or āblockchainsā may well change everything from online financial transactions to the way we vote and how we tell where goods are produced.ā
ā Klaus Schwab, Shaping the Future of the Fourth Industrial Revolution (2018)
The introduction of the digital ruble is on track and ahead of schedule, according to First Deputy Chairman of the Bank of Russia Olga Skorobogatova, speaking at the 2022 St. Petersburg International Economic Forum.
It will be possible to start testing Russiaās Central Bank Digital Currency (CBDC) in 2023, a year earlier than planned, she told the conference on June 16.
Russia should aim to be among the worldās top three innovators in the payment and financial sectors, Skorobogatova said, adding that the Bank of Russia was already working on the implementation of smart contracts for its centralized digital currency.
Russiaās central bank unveiled its plans to develop a digital ruble in October 2020, and a prototype was completed a year later. On February 15, 2022, the Bank of Russia announced that two of the commercial banks participating in the pilot program had successfully carried out financial transactions using the new platform.
āClients not only opened digital wallets on the digital ruble platform through a mobile application, but also exchanged non-cash rubles from their accounts for digital ones, and then transferred digital rubles to one another,ā the Bank of Russia reported.
Proponents of Russiaās CBDC claim it will āreduce costs and create opportunities for the development of innovative products and services.ā
The introduction of the centralized digital currency also comes with disadvantages. In December 2021, Vedomosti reported that the digital ruble would allow Sberbank and other Russian financial institutions to ātrack the spending of funds by citizens.ā
Blockchain consultant and cryptocurrency researcher Denis Smirnov told the paper that for ordinary Russians, āthe introduction of the digital ruble is the materialization of the most terrible scenarios described by science fiction writers in dystopias.ā
āAccording to the expert [Smirnov], with the advent of the digital ruble, absolute transparency will reign in the field of personal finance, which means that the human right to privacy will be under attack,ā Vedomosti wrote.
Speaking at Cyber Polygon 2021 ā which was co-hosted that year by the World Economic Forum and Sberbank ā Bank of Russia Deputy Governor Alexey Zabotkin gushed about the digital rubleās potential.
Russiaās CBDC āwill permit better traceability of payments and money flow, and also explore the possibility of setting conditions on permitted terms of use of a given unit of currency,ā said Zabotkin.
For example, parents could give their children digital rubles that have been programmed to block the purchase of junk food, the central bank official explained. āThat would be a useful functionality for a customer, and of course you can come up with hundreds of other similar use cases,ā Zabotkin also noted.
Russians wary of the Bank of Russiaās centralized, programmable currency can turn to the āprivateā sector for an alternative. In March 2022, Russiaās central bank issued Sberbank a license to issue and exchange digital financial assets. Using its own platform, Sberbank is expected to make its first digital asset transaction by mid-July, Deputy Chairman of the Board of Sberbank Anatoly Popov told TASS on June 15. The bankās centralized blockchain will allow companies to issue their own digital assets and make transactions using digital currencies deployed on the platform.
Sberbank has been tight-lipped about the first digital asset it will deploy. However, at the end of 2020, Gref revealed that his bank was teaming up with JP Morgan to create āSbercoin.ā The cryptocurrency ā reportedly a stablecoin ā has yet to launch and, due to sanctions, itās unclear whether JP Morgan is still participating in the project.
The Sberbank CEO has been a longtime cheerleader for digital currencies. A report from December 2013 claimed Gref ā then a newly minted member of JP Morgan Chaseās international board ā was exploring Sberbankās entry into the crypto market. In the same month, JP Morgan Chase announced it was building its own cryptocurrency using technology that the American bank first patented in 1999.
Avoiding the digital ruble wonāt protect Russians from unprecedented surveillance by the Bank of Russia, however. Starting in January 2022, the Central Bank began requiring Russiaās commercial banks to disclose information about all P2P (people to people) transactions, including personal data of senders and recipients of funds.
Safe (and smart) cities
āAs well as the rise of secure distributed ledgers such as the blockchain, innovations in IoT architecture encourage opportunities to find this balance in new ways. For example, Sensity Systems (a Verizon company) worked with Genetec to design smart city security systems to manage both security and privacy concerns.ā
ā Klaus Schwab, Shaping the Future of the Fourth Industrial Revolution (2018)
On June 20, 2022, Russiaās Kommersant newspaper reported that the Ministry of Emergency Situations (EMERCOM) was planning to deploy its Safe City system to regions bordering Ukraine ā Krasnodar Territory, Crimea and Sevastopol, and Voronezh Belgorod Oblasts. A source told the paper that implementation of the high-tech surveillance network had become an āextremely urgent taskā due to heightened security threats stemming from the special operation in Ukraine. (Kursk, located in a border region of the same name, became a āsafe cityā in March 2022.)
Created in December 2014, Russiaās Safe City program uses āorganizational, informational, analytical, predictive, and other methodological, technical, and technological solutions to ensure the safety and sustainable development of cities.ā
As EMERCOM explains on its website:
āSafe City is best known for its law enforcement bloc. Surveillance cameras that record violations of public order and traffic rules are installed and operate in almost all participating areas. However, the purpose of the project is not so much to respond to incidents, but to prevent them: to determine that trouble is looming before it occurs.ā
The federal program has been introduced across the country, including in Russiaās most far-flung regions. In Yamal, northwestern Siberia, 1000 video surveillance cameras will be installed this year as part of the Safe City project. Tatarstanās network of 60,000 Safe City surveillance cameras recently received a software upgrade that makes it possible to identify stray dogs, according to a local media report from April 2022. Murmansk announced in the same month that it will put 1400 cameras into operation as part of its transition into a āsafe city.ā Regional authorities said the surveillance system will include software capable of recognizing faces, suspicious objects, and trespassers.
A report from June 2021 found that Russia ranked second worldwide in terms of growth in the number of surveillance cameras. Chinese manufacturers have been the biggest beneficiaries of Russiaās increasing demand for surveillance equipment, according to Kommersant.
Moscow has undergone the most radical transformation among Russiaās āsafe cities.ā More than 213,000 CCTV cameras watch over the Russian capital ā and even privately operated security systems are now connected to the cityās centralized surveillance grid.
In May 2022, Moscow Mayor Sergey Sobyanin ordered nightclubs to link their cameras to a unified monitoring center featuring sophisticated facial recognition software. Similar instructions were issued in autumn 2021, when the mayorās office demanded that shopping malls connect their cameras to their centralized system so that city authorities could monitor compliance with mask rules. Around the same time, Moscow launched āFace Pay,ā a facial recognition payment system that has been installed in more than 240 metro stations across the capital. In September 2021, the Moscow Department of Education and Science unveiled plans to introduce facial recognition systems in city schools. Despite protests from parents, these new biometric security systems began to appear in schools in January 2022.
Like Gref, Sobyanin saw the COVID-19 pandemic as an opportunity to flex his managerial capabilities. In February 2020, the mayor announced that compliance with quarantine measures in Moscow would be monitored using the cityās facial recognition system ā with help from Sberbank.
On February 27, 2020, Gref revealed his bank was working on facial recognition systems specifically tailored to help Russia cope with COVID-19.
āWe are also developing masked face recognition technology. We tried to understand what our colleagues in China are doing. We did the same. We tried to look for our own solutions,ā the Sberbank CEO said.
In May 2020, with most of Russia still under lockdown, Gref outlined plans to allow schools and universities to reopen: a device developed by Sberbank would use facial recognition and temperature measurement to identify potential carriers of the virus.
Sberbank began developing biometric identification and payment systems long before the COVID-19 pandemic. In 2015, the bank launched Ladoshki (āLittle Palmsā), a cashless payment system for school meals, where instead of cards and smartphones, biometric data was used as an identifier.
āTo pay for lunch, the student puts his hand to the scanner on a special machine, selects a dish from the menu, and the money is automatically debited from the account attached to the biometrics,ā explained an article from October 2020.
The transition to biometric identification is not limited to Moscow schoolchildren. Regions were already testing biometric IDs in 2019, and the Ministry of Education wants facial recognition systems in all Russian schools by 2024.
In autumn 2021, Samara opened a new school where āthe safety and comfort of children come firstā:
āThe child holds a magnetic key up to the door to enter the school grounds. Then in the hall he passes through a turnstile, which identifies him. That same Face ID system measures the temperature of each visitor, and only allows them to enter if their temperature is normal. If the temperature of the child is elevated, the parents will be called and asked to take them home. A mechanism is being developed that will allow parents to monitor their children during the day and observe their movements.ā
Sooner or later, Russians of all ages will have to acquiesce to some form of biometric identification. In April 2021, Sberbank partnered with state-owned digital services provider Rostelecom to develop a Unified Biometric System. The database will eventually be merged with state institutions, requiring Russians to use a biometric ID to access government services.
The integration of biometrics into daily life is part of the Russian governmentās vision for the creation of āsmart cities,ā a national initiative that predates ā but has been greatly accelerated by ā the COVID-19 pandemic.
Spearheaded by the Ministry of Construction and Housing, Russiaās Smart City program aims to create āan effective urban management system, creating safe and comfortable living conditions for citizens.ā
Sobyaninās āSmart City ā 2030ā project for Moscow provides an extreme example of what this initiative hopes to accomplish. The ambitious reimagining of the Russian capital is already being carried out by the cityās Department of Information Technologies.
Among other perks, Moscow residents will be issued āgenetic passportsā that can be used to administer gene therapies. āWearable and implanted medical digital devicesā will collect information about an individualās lifestyle and calculate payments to health insurance companies.
By the end of the decade, Russiaās capital will harness ādigital technologiesā to ensure āsustainable growth in the quality of life of Muscovites,ā according to the projectās official website.
Genetic āVaccinesā
āEngineering different types of smart cell factories could also empower us to cope with emerging infectious diseases, for example, by the accelerated generation of vaccines and therapeutic antibodies.ā
ā Klaus Schwab, Shaping the Future of the Fourth Industrial Revolution (2018)
In April 2021, Russian President Vladimir Putin instructed his government to take drastic measures to ensure the country was prepared for another coronavirus-like health crisis.
āIn the event of an infection as dangerous as the coronavirus or perhaps more, God forbid, Russia must be ready within four days ā precisely within four days ā to develop its own test systems, and in the shortest possible time to create an effective domestic vaccine, to start its mass production,ā Putin said while addressing Russiaās legislature.
The lightning-fast development of tests and vaccines will be part of a āpowerful and reliable shield in the field of sanitary and biological safety.ā Sanitary Shield, a network of laboratories and border checkpoints tasked with safeguarding Russiaās biosecurity, is slated to be fully operational by 2030.
Although years away from completion, the rapid-response system sprang into action after the emergence of monkeypox in May 2022. In less than three weeks, Rospotrebnadzor, Russiaās agency for āhuman welfare,ā unveiled a PCR test to detect the new disease. The test was created āto assist the World Health Organization in developing advanced rapid diagnostic methods,ā according to Rospotrebnadzorās Vector Institute.
By the end of May, Vector had also registered a smallpox vaccine, āa genetic composition that forms stable immunity and at the same time has a high safety profile.ā
Itās unclear whether the drug was created in response to the new epidemiological threat or if it was developed beforehand in anticipation of such a scenario. Under Sanitary Shield, the rapid development of new vaccines will use Sputnik Vās genetic, adenovirus-based platform as a template.
āToday, science and engineering has reached a level that allows us to build [vaccines] like a designer, using biological, mathematical, and other methods,ā Deputy Prime Minister Tatyana Golikova explained in September 2021.
To understand the implications of this vaccine deployment strategy, itās important to understand how Russiaās flagship COVID-19 shot came into existence.
Developed by the Health Ministryās Gamaleya Center, Sputnik V is a two-dose vaccine that uses two different adenovirus vectors (Ad26 and Ad5) to transport āgenetic materialā to cells. The platform can be traced back to a 2012 patent application, listed on Sputnik Vās official website, which describes Gamaleyaās Ad5-based flu shot as a āgenetic vaccine.ā The influenza vaccine, GamFluVac, was never introduced into the international market and according to reports has yet to receive approval in Russia.
Gamaleya redeployed the same Ad5 platform to create a vaccine during the 2013-2016 Ebola epidemic in West Africa, but it was never submitted to the WHO for certification. A later attempt by Gamaleya to create a genetic vaccine to fight Middle East Respiratory Syndrome (MERS) was shelved without a finished product.
Despite these repeated failures, Gamaleya launched Sputnik V into orbit in record time.
Promoted as the āworldās first registered COVID-19 vaccine,ā Sputnik V received emergency use authorization from Russiaās Health Ministry on August 11, 2020, after completing combined Phase I-II trials involving 76 volunteers ā a process that lasted less than two months.
The speedy creation and rollout of the drug can be attributed to Gamaleyaās collaboration with Sberbank and the Russian Direct Investment Fund (RDIF), Russiaās sovereign wealth fund and the vaccineās main financier.
Although vaccine research and production is seemingly outside the purview of a bank, Sberbank played a critical role in Sputnik Vās early development.
āWe have good project management technologies and we were asked to quickly and efficiently facilitate the entire process, helping the Ministry of Health and, of course, the Gamaleya Center,ā Gref revealed in an interview with RBK in April 2021. The Sberbank CEO explained that his bank was āincluded in the work of creating a vaccineā and helped āensure the transfer of technology to production sites.ā
In May 2020, Sberbank registered a subsidiary, Immunotechnologies LLC, which was specifically created as a āproject office to support the production of a vaccine against the new coronavirus.ā
A government order issued by Prime Minister Mikhail Mishustin in December 2020 designated Sberbank subsidiary Immunotechnologies as the sole supplier of Sputnik V to Russiaās regions. It shipped the first 9 million doses of the vaccine before transferring supply and delivery logistics to state conglomerate Rostec in March 2021.
Grefās bank practically adopted Sputnik V as one of its own products. Sberbank employees were urged in May 2020 to participate in the drugās earliest phases of testing, and the company later launched a marketing campaign aimed at convincing Russians that ānormal lifeā would not return without mass vaccination.
The bank even released a promotional video ā complete with a wistful soundtrack and dramatic one-liners ā called āSberVaccination: ITāS TIME!ā
The Sberbank CEO led by example. In December 2020, Gref revealed he was among the first to be injected with Sputnik V. He later claimed the vaccine likely āsaved his lifeā during a business trip.
The head of Russiaās largest bank claimed he received the barely tested vaccine sometime in April 2020, meaning he was likely part of āinformal trialsā in which Gamaleya Center scientists injected themselves and family members with the experimental drug. Formal Phase I testing began on June 18.
While Sber got the project off the ground, RDIF ensured Sputnik Vās success in international markets.
RDIF CEO Kirill Dmitriev, a World Economic Forum Young Global Leader, Class of 2009, reportedly came up with the name āSputnik Vā (formally known as Gam-COVID-Vac).
Dmitrievās talent was spotted at an early age. The Soros Foundation awarded him a scholarship to study in the United States, where he attended Stanford University and Harvard Business School. After graduation, he worked for Goldman Sachs and McKinsey & Company before taking the reins at RDIF in 2011.
In June 2020, RDIF announced a joint venture with R-Pharm, one of Russiaās largest pharmaceutical firms, to manufacture and distribute what later became known as Sputnik V. The pair already had a close relationship: In 2018, RDIF acquired an estimated 10% stake in R-Pharm.
RDIFās decision to partner with R-Pharm would prove to be a shrewd investment decision that gave Russiaās sovereign wealth fund access to markets that were closed to Sputnik V.
On July 17, 2020, AstraZeneca announced R-Pharm would become āone of the hubs for the production and supply of [its] vaccine to international markets.ā Under the agreement, the British-Swedish pharmaceutical giant agreed to transfer its adenoviral vector to Russia. R-Pharm would then be tasked with āfinishingā doses and shipping them abroad.
āAstraZeneca is confident that, together with R-Pharm, it will be able to supply millions of people with the vaccine in the most efficient way,ā the company wrote in a statement.
Their partnership was strengthened and expanded in December 2020, when RDIF, AstraZeneca, the Gamaleya Center, and R-Pharm signed a memorandum of cooperation. Under the agreement, the partners launched joint trials in hopes of eventually developing a vaccine ācocktail.ā
āToday we announce a clinical trial program to assess safety and immunogenicity of the combination of AZD1222, developed by AstraZeneca and Oxford University, and Sputnik V, developed by Russian Gamaleya Centerā¦ Both AZD1222 and Sputnik V are adenoviral vector vaccines that contain genetic material of SARS-CoV-2 virus spike protein,ā AstraZeneca said in a December 11 press release.
While AstraZenecaās shot has been repeatedly linked to blood clotting and other serious adverse reactions (most recently in May, when the Telegraph reported that the drug āmay increase the risk of a serious neurological conditionā), far less is known about Sputnik Vās safety profile.
Russia does not have a VAERS-like database that the public can use to report and view suspected post-vaccination complications. However, an abundance of evidence raises doubts about the Russian governmentās claim that Sputnik V is āsafe and effective.ā
In September 2021, Dr. Vitaly Zverev, a professor of virology and member of the Russian Academy of Sciences, found a close correlation between the increase in vaccination and the increase in morbidity and mortality from COVID-19 in Russia.
āNobody knows about the long-term consequences [of the vaccines]. Therefore, it is impossible as of now to vaccinate three times with the vector adenovirus vaccine that is actively used in Russia [Sputnik V],ā Zverev concluded.
A separate analysis by Russiaās Krasnaya Vesna, which inspected Sputnik Vās safety record in countries that report adverse reactions, determined that āin terms of the frequency of expected mild and severe (requiring hospitalization) side effects, [Sputnik V] is comparable to foreign counterparts.ā
Despite the clear red flags, Russiaās Health Ministry continues to stonewall calls for greater transparency. In January 2022, the ministry explained that it would be āimpracticalā to publish data on the number of deaths among those vaccinated, since āsuch information does not objectively reflect any relationship between deaths and vaccination and may cause a negative attitude towards vaccination.ā
A few days later, a State Duma deputy who tried to obtain the most recent clinical trial data for Sputnik V was informed by the Health Ministry that such information was a āconfidentialā trade secret that belonged solely to the drugās developer.
In the eyes of the Russian government, Sputnik V represents a resounding victory for next-generation genetic technologies.
āWe have developed several such breakthroughs in parallel. This primarily concerns the Sputnik V vaccine, which uses genetic technologies and is already in use today,ā the Russian Health Minister said in November 2021, adding that Russia was already creating new vaccines based on Sputnik Vās platform.
As for Sputnik Vās much-vaunted efficacy: On April 10, 2021, Alexander Gintsburg, the director of the Gamaleya Center, predicted that Russiaās flagship vaccine would provide lifelong immunity against COVID-19. Exactly one year later, on April 10, 2022, Gintsburg recommended that Russians get revaccinated every six months and even encouraged COVID-conscious citizens to receive two boosters at the same time.
Sustainable development
āWe must develop overarching global governance principles while respecting nationsā different historical, economic, social and cultural systems, ethical norms and values. This will require finding common, broadly accepted values and building on existing governance, such as the Universal Declaration of Human Rights and the UN Sustainable Development Goals. [ā¦]
Besides consumer drivers and reputational hazards, government regulation will be crucial to making manufacturers responsible for the environmental impacts. Luckily, to meet our sustainability goals, other technologies of the Fourth Industrial Revolution provide innovative solutions in this governance space.ā
ā Klaus Schwab, Shaping the Future of the Fourth Industrial Revolution (2018)
On September 4, 2020, Sberbank participated in the first event of Russian Chapter, the Russian branch of the World Economic Forumās Climate Governance Initiative (CGI).
āEnvironment and sustainable development issues ā ESG (environmental, social, governance) ā rank high on Sberbankās list of strategy and corporate culture priorities,ā the bank said in a press release. āSberbankās environmental policy covers all domains, from interactions with external customers and investors to the responsible behavior of every employee. Following the principles of sustainable development helps to reduce the negative environmental footprint.ā
In December of the same year, Sberbank became a general partner to Russian Chapter, describing the move as an āan important step to achieve one of the ambitious goals outlined in Sberbankās new strategy, which is to lead Russiaās sustainable development agenda.ā
The newly created forum met on December 17, 2020 to discuss āhow Sberbank is reshaping its strategy and incorporating sustainability into its business modelā and āhow the Central Bank of Russia works together with key international organizations to share best practices in climate risk management.ā
The bank took its role as a trailblazer for ESG in Russia seriously. A year later, on December 1, 2021, Sberbank announced the formation of Russiaās National ESG Alliance.
Composed of 28 companies responsible for 10% of Russiaās GDP, the group was conceived as a āpermanent platform for dialogue and engagement for all stakeholders.ā
Founding members included oil giant Gazprom Neft and Sputnik V manufacturer R-Pharm.
According to Gref, the Alliance aimed to combine the efforts of leading companies to ādrive the [ESG] agendaā in Russia:
āWe realized that we had to work on shaping regulatory frameworks, standards, and implementation control procedures, forming a new legislation that will stimulate all market participants to comply with ESG standards, and promoting the interests of Russia and Russian companies internationally.ā
On April 21, nearly two months after the start of Russiaās special operation in Ukraine, the Alliance convened a meeting in order to āupdateā its work plan for the year, ātaking into account the specifics of the current political and economic situation.ā
Among other goals, the group resolved to āreplenish and strengthen national ESG infrastructure related to reporting, standards, ratings, certificationā; ācontribute to the improvement of national ESG regulation, including the climate and carbon agendaā; and ā[promote] educational activities [in Russia] on the subject of sustainable development, directed at a wide target audience.ā
āWe see that, despite the difficulties, companies remain committed to the ESG ideology and are not abandoning their earlier commitments to environmental, climate, and social initiatives,ā the groupās CEO, Andrey Sharonov, said, summarizing the meetingās outcome.
These werenāt empty words. ESG was a top agenda item at the 2022 St. Petersburg International Economic Forum (SPIEF). On June 16, conference-goers discussed āThe Importance of the Climate Agenda in Key Eurasian Economiesā:
āA joint climate agenda should be one of the unifying projects in such a diverse region as Eurasia. Today, economic cooperation needs to be developed as part of the climate agenda, partly in an effort to achieve the goals of the Paris Agreement and the UN Sustainable Development Goals ā¦ā
Panelists included Russiaās First Deputy Minister of Economic Development Ilya Torosov, Sberbankās Senior Vice President for ESG Tatiana Zavyalova, and National ESG Alliance CEO Andrey Sharanov.
What does āeconomic cooperationā as part of āthe climate agendaā mean for one of the worldās largest energy exporters?
At the end of January, Vedomosti published an in-depth report about how the National ESG Alliance might accelerate Russiaās integration into the European Unionās carbon credit system.
Under the blocās Carbon Border Adjustment Mechanism (CBAM), starting from 2026, importers of cement, iron and steel, aluminum, fertilizers, and electricity will be required to purchase carbon certificates corresponding to the ācarbon priceā that would have been paid to produce the goods inside the EU. As Vedomosti pointed out, this new scheme will require Russia to develop its own carbon regulation and emissions trading system in order to stay competitive as a raw materials exporter.
The growing economic rift between Moscow and Brussels would suggest that compliance with EU regulations is no longer the Allianceās top priority. However, this does not mean Russia has dropped ESG. Instead, the group has called for āsystematic dialogue with cross-country associations in ānewā markets, including the BRICS countries, the Eurasian Economic Union, and part of the Asia-Pacific region, as well as establishing interaction with the ESG expert communities in these regions.ā
The client path: Which way, Russia?
While Moscow may be parting ways with its āWestern partnersā in search of more reliable markets, it is necessary to ask what the continuation of this economic and political pivot ā which began more than a decade ago ā means in practical terms.
On February 4, Russia and China released a joint statement declaring a ānew eraā for international relations and global sustainable development:
āIn order to accelerate the implementation of the UN 2030 Agenda for Sustainable Development, the sides call on the international community to take practical steps in key areas of cooperation such as poverty reduction, food security, vaccines and epidemics control, financing for development, climate change, sustainable development, including green development, industrialization, digital economy, and infrastructure connectivity.ā
Are Moscow and Beijing resisting the Davos-endorsed path, or are they building a parallel system using a similar blueprint? Are these two āsustainable developmentā partners opposed to world governance or do they instead want to be equal āstakeholdersā in existing and future global superstructures?
The argument that Moscow is begrudgingly mirroring the West as part of a biothreat-fueled technocratic arms race raises a whole other set of questions. Can Russia responsibly harness technologies that have been abused and misused by western governments? If a PCR test is not fit for purpose in the West, can the same test protect Russia from biological threats as part of its Sanitary Shield program? Is the global adoption of CBDCs an attack on financial freedom in the United States, but a necessary measure to ensure Russiaās economic sovereignty?
These are the kinds of questions we should be asking ourselves as our increasingly chaotic world fragments into seemingly irreconcilable blocs.
Whether in the East or the West, will the āclient pathā be fundamentally different?
