Key Areas of Activity

Providing Quality Information on Rating Assignments

GRI 3-3, 203-2

Being under direct regulation of the Bank of Russia, Expert RA fully complies with the requirements of Federal Law No. 222-FZ On Credit Rating Agencies, which guarantees the legal impeccability and validity of the decisions taken. A rating committee is entrusted with decision-making on any rating action. The rating committee is a collegiate body composed of industry-relevant and expert analysts. In keeping with the rules against conflicts of interest, none of the rating committee analysts has any interest in the business of a rated entities under review.

Expert RA realises that the key resource and driver of the rating assignment activities and other rating services are its employees, who must have appropriate competencies and expertise. For this reason, Expert RA makes every effort to encourage its analytical staff and assist them in improving their qualifications and experience and enhancing the industry profile of the rating analysis.

When making a rating decision, Expert RA’s employees follow, completely and utterly, the topical methodology, whatever is relevant to the rated entity. Expert RA's Methodology Department reviews existing methodologies and keeps them updated on a regular basis. In 2024, 65 meetings of the Methodology Department working groups were held to review 44 methodologies.

Expert RA is implementing automation and digital transformation projects to speed-up calculations and accelerate the rating analysis. Such projects optimise the work of analysts, giving them more time to conduct high-quality analysis and draw more balanced opinions, and decrease the human factor risk involved in the calculation of different metrics.

Expert RA tries to respond promptly to different events happening in the country and changes in the state of a particular industry or particular rated entity that may affect its credit and non-credit ratings. To this end, Expert RA conducts regular, ongoing and extended monitoring reviews on a systematic basis. Expert RA interacts with rated entities to update data on their financial and non-financial condition.

At the end of the rating process, Expert RA publishes a press release on its corporate website as a notification of a completed rating action. The press releases inform the audience of all factors and assessments, including stress factors and support factors, that had a material impact on the rating level. In 2023, Expert RA updated its pattern and structure of press release writing to made press releases easier to read and understand the rating rationale. This change has been positively received by rated entities.

Assistance in Market Infrastructure Development

GRI 3-3, 203-2

Our experts conduct research and participate in various working groups and councils, allowing the stakeholders to receive more information and opportunities for an effective development of the market infrastructure.

Expert RA contributes to the development of financing practices among not only large, but also small and mid-sized enterprises (SMEs). Better developed mechanisms and increased access to financing for SMEs work to the advantage of the economy as a whole (through the development of a healthy competition, creation of new jobs, and incentivation of innovations and new technologies).

An assigned rating increases investor confidence incentivises rated entities to issue and service their financial instruments, and reveals potential growth areas. All this helps them to raise funds, enhance their investment appeal in the eyes of all types of investors, and increase their capitalisation.

Infrastructure development also helps increase the number of investors, particularly those from the collective and retail investor groups. Our work helps increase information transparency and consequently facilitate informed investment decisions.

Responsible Finance, ESG Rating Development and Management Quality Ratings

2024 Key figures	27 ESG ratings, including 12 new assignments 5 management quality ratings 2 conferences on sustainable development 64% of the entire ESG financing market (in quantity)
Material Topic	Contribution to the development of the responsible finance market and ESG ratings
UN SDGs
Target group	Clients and lcal community
Key aspect	ESG products

GRI 3-3, 203-2

Expert RA consistently studies international sustainability practice experience for the purpose of stabilising businesses of whatever kind and safeguarding their stakeholders. Internationally, there is an institutionalised practice of independent acknowledgement, verification and assessment of sustainability efforts and performance. In view of the importance of such processes for any type of business and jurisdiction, Expert RA has embarked on promoting the sustainability, responsible finance and ESG assessment agenda in Russia.

A special place in this work is occupied by regular industry research covering all aspects of ESG transformation: from corporate financing practices to assessing the level of business transparency and comparative analysis of sustainable development of urban areas.

In our opinion, the education of all market participants is the primary and basic instrument for developing the responsible finance and ESG ratings market. This education can take forms of telephone calls to existing and potential customers and stakeholders, or public speeches, analytical publications and journal articles or an active involvement in conferences. Traditionally, Expert RA publishes research in the areas of ESG financing, ESG banking, ESG transparency, ESG ranking of cities, etc.

In 2024, our staff took part in the activities of six working groups, expert councils and committees focused on the improvement of regulation and the development / promotion of the ESG finance and rating markets, management of non-financial risks and the disclosure of non-financial information.

In a nutshell, Expert RA sets the following objectives for the establishment and development of a system-based responsible finance and ESG ratings market:

• Disseminate information among corporates and individuals, explaining what ESG, sustainable development, ESG finance, ESG ratings are.
• Inform and educate market players about the current ESG agenda in the country, including the industry specifics, through review and analytical materials and surveys, and join different expert communities and groups.
• Enhance the ESG finance and rating development through lobbying for government support instruments.
• Establish and encourage the demand of retail and collective investors for ESG investing.

ESG Ratings

In doing our work, we realise not only the role of financial instruments issued to finance specific ESG projects, but also the importance of in-house adoption of ESG practices and ability to manage external impacts on the environment and society.

In our opinion, not only the financial market and the real sector participants may be engaged in implementing the ESG agenda, but the regional and local governments as well. Expert RA was the first Russian Agency to assign ESG ratings to certify entities’ performance and achievements in the ESG field.

Much like the credit rating, the ESG rating is an important element of the comprehensive assessment of a rated entity. This comprehensive assessment helps investors make informed investment decisions. Also, the ESG rating is an efficient tool for selecting counterparties and employees, and is useful for shareholder control of an entity or interacting with government authorities.

When assigning a ESG rating, Expert RA JSC fully complies with all procedures set out in Federal Law on the Activities of Credit Rating Agencies No. 222-FZ dated 13 July 2015.

Expert RA believes and is making efforts to get ESG ratings regulated directly. This would ensure transparent, unbiased and responsible rating decision making.

Expert RA does its best to make its methodologies and press releases as transparent as possible by disclosing key assessment factors affecting its ratings and providing a graphical representation of every analysed component of the ESG rating. We pay special attention to updating the ESG Rating Methodology with account of industry specifics and the market participants’ feedback to issued requests for comment. In 2024, the Methodology was updated with consideration to the update of industry benchmarks, accumulated practice, proposals from market participants, clarification of wording and introduction of technical amendments.

At the end of the reporting period, Expert RA was maintaining 27 ESG ratings, which accounted for 38% of the entire Russian ESG ratings market. During the entire history of rating assignments (up to the end of 2024) entities from the banking sector accounted for the largest part of our ESG rating list.

Verification of Financial Instruments for Sustainable Development

Expert RA realises the importance of developing the ESG finance market and letting it function on an ongoing basis to ensure systematic funding of sustainable development projects for companies and regions. The implementation of such activities and projects will not only reduce violations of the environmental and labour laws but will also improve the overall performance in those areas.

Expert RA seeks not only to stimulate the issuance of classic ESG-related financial instruments, but also to take part in new and complex financial instrument verification cases to with a view to setting relevant precedents in Russia’s young ESG finance market. The decrease in the number of verifications is due to the new geopolitical risks, turbulence and general uncertainty in the financial market.

However, we do not consider the situation fatal, on the contrary, we expect activity to recover as the macroeconomic situation stabilises. Therefore, Expert RA is not slowing down, continuing its methodical work on developing the market infrastructure.

Management Quality Ratings

Expert RA is a leader in Russia in the field of management quality assessment. Management quality ratings have long been an authoritative tool for analysing the level of organisation of corporate practices in Russian companies. The assessment methodology includes four key areas: positioning, management and control bodies, information transparency, as well as the rights of owners and other stakeholders. Ratings are classified on a scale from A++.gq (the highest level) to C.gq (low level).

Expert RA ratings serve as an important reference point for investors and regulators, allowing them to objectively assess the quality of corporate governance in Russian companies.

Raising Financial Literacy and Sustainability Awareness

2024 Key Figures	8 conferences held with Expert RA's participation 6 webinars organised with the participation of Expert RA staff 65 research and analytical reviews and 31 articles prepared
Material Topics	Raising Sustainability Awareness Raising Public Financial Literacy
UN SDGs
Target group	Clients and Local Community
Key aspect	Financial Literacy and Sustainability Awareness

GRI 3-3, 203-2

We strive to widely disseminate information about the structure, functioning and trends of the financial market, the essence and risks of financial products, and methods of financial analysis of issuing companies. The tools for this are analytical research, public webinars, articles and comments in the media, publications in the Expert RA telegram channel and on the corporate website.

What tasks do we set for ourselves as part of our activities to improve financial literacy:

• Mastering the basic level and raising a more advanced level of financial knowledge and financial analysis skills, including the ability to process and understand the meaning of published press releases about assigned credit / non-credit ratings*
• Getting a wider range of stakeholders covered by this topic, taking account of their age and professional experience
• Promoting a prudent and reasonable investment of available funds

In 2024, the Agency assisted the organisation of eight external events aimed at promoting awareness about the development, regulation and forecasting in the banking, insurance, corporate and other markets, and held six webinars on its own.

The list of events held in 2024.

In 2024, Expert RA used its telegram channel to publish articles and posts dealing with the basics of financial analysis, and also addressing new economic reforms and people playing outstanding roles in economics, finance and sustainable development in Russia and the world. At the end of 2024, the channel had more than 14,000 viewers.

Expert RA also holds in-house webinars for its employees on its new and updated methodologies related to its different services, including the ESG products and practices.

Expert RA publishes different analytical materials, including research, opinion pieces and columns and interviews on a wide range of topics concerning the financial market and the economy sectors.

In addition to organising events, our staff regularly take part in different working groups, meetings, committees and other activities of regulatory and infrastructure agencies, attend conferences and speak in the media. Our staff express their expert opinion at events designed to promote the development and expansion of the market for individual and responsible investment.

At the end of the period under review, Expert RA employees were taking part in a number of specialised expert committees, councils, working groups, and commissions dealing with sustainable development.

In addition to promoting financial literacy, Expert RA seeks to improve its information openness and transparency, and shares its experience in financial management, corporate governance and sustainable development best practices as part of engagement with all of its stakeholders.

Expert RA’s absolute priority is promoting the ESG agenda and communicating with its customers and other stakeholders. In particular, Expert RA pays special attention to exchanging best practices with its customers and counterparties and also interacts with higher educational institutions focused on the basic and advanced training of personnel in the area of sustainable development and providing information about the status of the ESG agenda in Russia.

Charity Projects and Volunteer Activities

2024 Key figures and facts	In 2024, Expert RA held two charity mini-football tournaments among financial organisations. On 11 October 2024, employees of Expert RA and Expert Business Solutions JSC, with the support of the Save the Forest company, held an environmental campaign to restore forests
Material Topic	Investments in charitable projects and volunteer activities
UN SDGs
Target group	Clients and local community
Key aspect	Charity and volunteering

GRI 3-3, 413-1

Charity Tournament 'Expert RA Cup'

In April and September 2024, the Agency organised two charity mini-football tournaments among financial organisations. Representatives of the banking sector, leasing, and insurance companies took part in the events.

Expert RA Cup is sports, charity, and networking in one format:

• Part of the funds from the tournaments went to purchase equipment for the Federation of Blind Football Players – we support children's adaptive and Paralympic sports.
• The programme included not only sports competitions, but also business communication in an informal setting.
• The tournaments strengthened professional ties and drew attention to inclusive sports – the media and the tournament participants themselves highly appreciated the event.

Environmental Action for Forest Restoration

On 11 October 2024, employees of Expert RA and Expert Business Solutions JSC, with the support of the company Sokhrani Les LLC (Preserve the forest), held an environmental campaign to restore forests. It became a natural continuation of the annual conference on sustainable development ESG-day. In one day, the participants of the campaign planted about 4,000 pedunculate oak seedlings on an area of 2 hectares in the Ugra National Park in the Kaluga Region. An oak forest once grew on these lands, but it was destroyed when agricultural lands were expanded. Now the park administration and volunteers are actively restoring the lost forest areas, and our campaign has become part of this programme. The event was attended by more than 100 people, including not only Expert RA employees, but also representatives of its partner and client companies: Cbonds, Mosinzhproekt, Loko-Bank, Dialot Investment Company, etc.