AmCham: ESG is Too Often a PR Topic, More Than a Strategic Priority for Companies

As the world faces numerous serious challenges – from climate change to social inequalities – the business sector has a responsibility to implement change, but also the opportunity to lead important initiatives that can help shape future prosperity for all. This is a good strategy for sustainable growth and development that is not driven solely by profit creation, but also includes achieving net-zero emissions, good employee care, and transparency in decision-making processes – all elements that make a successful company that will help people improve their lives in the long term.

In the opening presentation of the conference ‘Sustainability of Business with ESG Principles’, organized by the American Chamber of Commerce in Croatia (AmCham), Mitja Pirc, director of Kearney, presented research results indicating that two-thirds of global Private Equity funds say they have integrated ESG into their investment strategies, yet only 8 percent of them are signatories to the UN Principles for Responsible Investment. Too often, ESG is more of a PR topic than a strategic priority for companies. The facts are clear: when analyzing global industries, it is revealed that investments in ESG yield up to a 100 percent premium in valuation; in the EU, 30 percent of consumers are willing to pay a premium for products that have a positive ESG impact, and more than 60 percent of employees inquire about the company’s sustainable business practices during the hiring process, as stated in the press release.

– For RBA, ESG is an extremely important topic. Through the Sustainability department, we are implementing processes of internal green transition, and ESG has also been integrated into our business through the creation of products and services that direct money into sustainable projects. We can proudly say that we are the first bank to issue Sustainability bonds through which we raised 200 million euros, which will finance green and social projects of Croatian entrepreneurs – said Ante Odak, member of the Management Board, Raiffeisen Bank Croatia.

ESG Criteria are Instruments for a Sustainable Economy

After the opening presentations, a panel discussion followed, featuring Ana Zorić, director of the Directorate for Economy and Financial System, Ministry of Finance; Ante Odak, member of the Management Board, Raiffeisen Bank Croatia; Marija Pujo Tadić, president, International Institute for Climate Activities (IICA); Amorella Horvat Topić, Manager, ESG Services, PwC Croatia; and Ivan Franičević, president of the Management Board, Rasco, who discussed the adaptation of the business sector to adopted legislation, the obligations of companies in Croatia, and the future impact on business practices.

– The European Union is, as in many topics so far, a pioneer in the transition to a climate-neutral, climate-resilient, resource-efficient, and fair economy. Although this is a long-term project, a sustainable and inclusive financial system, and thus the economy as a whole, along with activities aimed at environmental sustainability, will be key to achieving the goal of making Europe the first climate-neutral continent – emphasized Ana Zorić, director of the Directorate for Economy and Financial System, Ministry of Finance.

Marija Pujo Tadić, president, International Institute for Climate Activities (IICA), emphasized that climate change is one of the greatest challenges of the 21st century, and how we will cope with its consequences largely depends on how we prepare our economy. The Paris Agreement established targets for reducing CO2 emissions and outlined the transition to a low-carbon – sustainable economy for the entire world. The instrument for transitioning to a sustainable economy is the so-called ESG criteria, the introduction of which is becoming mandatory for both the financial and business sectors. Integrating ESG criteria also means strengthening the capacity of states to combat the consequences of climate change, and comprehensive education on ESG at all levels within companies and financial institutions is certainly one of them, as it will contribute to transparent and ethical business practices in the broadest sense of the word and in all segments of society.

– Sustainable business, or business that includes responsibility towards the community in its strategic thinking, is not a novelty, so the EU regulation has not surprised us, experts in sustainable business, except perhaps in its scope. We can say that ESG is just a new name for the systematic monitoring of companies’ sustainability and transparent reporting. ESG systematizes and compares sustainability strategies and companies’ progress in their implementation. We always emphasize to companies that ESG is an excellent tool for systematic monitoring and mitigating risks, or recognizing opportunities, and with the right sustainable strategy, those opportunities will come to life and ensure financial profit, whether by entering new markets or expanding offerings to existing customers/clients – emphasized Amorella Horvat Topić, Manager, ESG Services, PwC Croatia.

The Market Demands ESG Practices

ESG sometimes seems like an unattainable topic reserved for large companies. However, more and more small companies are examples that this is no longer the case. Ivan Franičević, president of the Management Board, Rasco, pointed out that they regularly encounter customer inquiries about ESG practices. If they had not decided to focus on sustainability themselves, the market would have forced them to do so sooner or later.

Sustainability is not just a question for the large – companies of all sizes no longer have a choice but to operate sustainably, concluded Franičević.