On 26 May the Rostov Region Legislative Assembly held a hearing on «Measures to Ensure the Sustainable Operation of Rostov Region's Industrial Sector». On the invitation of regional legislators, Chairman of the Board of Directors of Center-Invest Bank, Dr. Vasily Vysokov, spoke at this event: he talked about experience of sustainable development and proposed ways in which sustainable development mechanisms could be used to build the region's post-crisis economy.

In 2007 Center-Invest Bank became the first Russian bank to be a runner-up in the «Sustainable Banker of the Year» category of the Sustainable Banking Awards held by the Financial Times (FT) and International Finance Corporation (IFC). (To date, it is still the only Russian bank to have made it this far.) The governor of Rostov Region, Vladimir Chub, congratulated Center-Invest on this win, as did international financial institutions and leading southern Russian companies.

In 2008, Chairman of the Audit and Compliance Committee of Center-Invest Bank's Board of Directors, Tatiana N. Vysokova, (Ph.D in Economics, Reader) was a winner in the «Women in Business Awards» held by the European Bank for Reconstruction and Development (EBRD). Her speech addressing the role of women in sustainable development has been quoted at staff meetings by Rostov Region company directors.

This year, Center-Invest Bank has been short-listed in the FT and IFC competition in the «Sustainable Emerging Markets Bank of the Year» category. The speaker of the Rostov Region Legislative Assembly has congratulated the bank and wishes Center-Invest success in the final. The winners will be announced in London on 4 June.

Both the Administration of the President of the Russian Federation and the governmental commission on sustainable development are drawing on Center-Invest Bank's experience of sustainable development. This experience is reflected in the trilateral agreement between the Rostov Region Administration, employers, and trade unions. Center-Invest Bank is putting together proposals for the leaders of the G20 on sustainable banking as the cornerstone of the post-crisis international financial system.

«In the Russian language, the word «ustochivost» [used to translate the English word «sustainability»] refers to both patching up holes to stop a ship from sinking, and also to stable, sustainable growth. In international practice, however, the term sustainability is generally used to mean development in the interests of current and future generations», said Dr. Vysokov, speaking at the parliamentary hearing. «There is a fairly large legal framework for sustainable development in the form of the Equator Principles, the Global Compact, etc. In practice, sustainability for a company means not focusing on short-term benefits, but rather running one's business so as to maximise profits over an unlimited period of time, taking into account social and environmental risks. Businesses are already benefiting from the introduction of new technologies, products and services, the acquisition of new knowledge by their employees, the growth of the regional economy, increased transparency, and also from reduced risks that partners could behave unscrupulously, that environmental problems could arise, and that their reputations could be damaged. As a result, new relationships are being established with suppliers, customers and employees. For sustainable development, as a minimum, companies should adhere to a Corporate Governance Code, be audited in accordance with international and Russian standards, obtain independent ratings, and have a sustainable development strategy, and risk management and internal control systems. For the authorities also, sustainable development implies that they will have a Corporate Governance Code, a sustainable development strategy, and transparent plans for infrastructure development and social and economic development. For the population, sustainable development means independent learning, a healthy way of life, and conscientious work.»

From Dr. Vysokov's speech:

The experience of the Rostov Region is important in that sustainable development is used not as charity or as means of «diverting» public money, but rather as the basis for genuinely successful business.

1. Center-Invest Bank now has an energy efficiency loan portfolio of RUR1 billion. We have attracted funds from international financial institutions to develop energy efficiency: IFC, the EBRD, FMO, KfW, and OeEB. The best known project is: the closure in the city of Taganrog of 20 boiler houses that posed a fire risk, and the construction and refurbishment of ten new facilities. This has cut annual CO2 emissions by 6,800 tonnes and costs by 30%. A ten-year loan for modernising the boiler houses has been obtained from the EBRD. The project has a payback period of 12.5 years, but the new boilers will operate for 25 years for the benefit of future generations. This is a good illustration of the sustainability principle: focusing on long-term profits, rather than immediate, short-lived gains.
2. SMEs are a rapidly developing sector of the Don economy. In the last seven years, the share of SMEs in the gross regional product has doubled. The trend began when the Rostov Region first started devising programmes that were aimed at developing enterprise, rather than simply supporting it. As well as money from state budgets, bank loans were included in the figures for these programmes, which increased the amount of support for SMEs by 1000 times. This is the highest indicator in the country for all of the publicly funded special-purpose programmes, and it demonstrates sustainability in terms of the mechanisms for the interaction between business and the authorities. On the eve of the Russian national celebration «Entrepreneurs' Day», Center-Invest Bank launched a new project «Enterprise for All», the aim of which is to educate the general public, young people, teachers, and civil servants in the basics of entrepreneurialism. Educational materials are available on the bank's website and reproduced for television broadcasts.
3. Center-Invest Bank is the leader in SME lending in the Rostov Region. Moreover, it is the leader in terms of loans made to the agricultural sector and industry in the new economic environment. In October 2008 the bank presented its customers with a new programme, «Southern Russia Versus the Global Crisis». The programme makes recommendations on managing liquidity, meeting social obligations, monitoring markets and prices, and revising business plans. This work is already being carried out by Don businesses: many companies are adjusting their business processes so as to be competitive in the post-crisis economy. This will require companies to cut their costs by 30%. Just since the beginning of this year, Center-Invest has attracted USD55m from the financial markets, for a five-year period, to finance post-crisis development projects. This is an example of using sustainability as an instrument to attract investment for effective business.
4. Our children should be 20 times more intelligent than their parents. To support talented young people, Center-Invest Bank set up the Endowment Fund for Education and Science in the Southern Federal District. 250 students receive scholarships from this fund: in total, RUR5m is provided in scholarships. These students chose the best teachers, who then received grants from the endowment fund. The SFedU-2020 Project brought to light some of the latest scientific and academic issues being explored at the Southern Federal University. In the last few years, approximately 40,000 schoolchildren have visited exhibitions on local history free of charge. In all, the bank provides about RUR7m in support of education. This is investment in our customers’ children.
5. In 2007, 36 children were born to Center-Invest employees, and in 2008, there were 76 newborns, and since the beginning of the current year — 21. We do not see it as a disaster when a woman leaves on maternity leave: business processes are adjusted in advance, allowing for her return to work and retention of her skill level. This is a very clear example of sustainability in our approach to our personnel.
6. From these examples it is clear that sustainable development differs both from the speculative growth of market bubbles, which gives rise to deep crises, and also from administrative decisions based on the principle of «follow the leader» and focal points for growth, resulting in short-lived waves in the economy (upturns quickly followed by downturns).
7. In terms of practical steps to ensure its sustainability, the Rostov Region authorities must:
   1. make each ruble of public money work harder by: better informing businesses about planned infrastructure projects; allowing more companies to bid in municipal and government tenders for the supply of goods and services; and co-financing infrastructure projects;
   2. use the potential of supervisory and regulatory bodies to produce proposals on developing enterprise at the municipal level;
   3. together with business associations, put together and implement proposals for the sustainable development of individual sectors and spheres of activity, including proposals for implementation at the municipal level.
8. The title of Nobel Prize winner M. Sholokhov’s novel «Tikhy Don» (literally «Quiet Don») is translated in English as «Quiet Flow the Don». The longer translation reflects the following: at the beginning and end of the novel the main protagonist visits the banks of the River Don. In the many intervening years, his family, his country, and indeed the world as a whole have seen great suffering, but the river still flows quietly, just as before. When the publishers Kogan Page asked me to write an overview of the progress of reform in the Don Region, I took the liberty of using the same name for my article, «Quiet Flow the Don», because in the 1990s reforms were implemented in our region without a civil war. I am confident that, thanks to the relationships and cooperation between the business community, the authorities, and politicians, once today's crisis is over the next article can be called «The Sustainable Don».