Society and the economy of today are primarily based on consumption and constant growth, and have been for 250 years. About 70 percent of the U.S. GDP comes from consumption. It is becoming increasingly clear that the way we live, do business, and invest is no longer sustainable, socially, environmentally, or economically. Alongside all the pandemic, war, inflation, and numerous other challenges, climate change at the global and European level has been assessed as the most alarming and far the most dangerous, as stated in a statement from the Croatian Chamber of Economy.
The European Commission estimates that an additional €350 billion in investments will be needed to achieve the emission reduction target by 2030, just in energy systems, along with €130 billion for other environmental goals. The EU intends to spend up to €605 billion on projects to address the climate crisis and €100 billion on projects supporting biodiversity.
There is an increasing likelihood that investments in unsustainable activities and assets will be eradicated as climate and environmental challenges grow. Insufficient integration of these risks complicates the redistribution of funds and can lead to difficulties during adaptation, which will affect financial stability. Accordingly, environmental regulations must be supplemented with a framework for sustainable financing that directs financial resources to investments that reduce exposure to such risks.
Since the scope of necessary investments significantly exceeds the capacity of the public sector, the main goal of the sustainable financing framework is to direct private financial flows into appropriate economic activities. Private interest in sustainable investments has significantly increased in recent years, but a clear, consistent, and robust framework for sustainable financing is needed for it. The EU is establishing this framework.
Sustainable investments enable long-term stability
As part of the ESG Academy of the Croatian Chamber of Economy, a workshop on Investing in Sustainable Business will be held on January 26, aimed at board members and decision-makers in financing.
– The topic is very relevant, and the workshop will provide answers to all questions related to sustainability and the changes that the new regulations bring to our business and financing. We want to provide a comprehensive view of the topic since there are many open questions from our members and it is a topic that is continuously evolving and developing – said Marija Šćulac Domac, Director of the Sector for Industry and Sustainable Development of the HGK.
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The topic of ESG analysis and investments in the capital market will be presented at the workshop by Sasja Beslik, a prominent banker and one of the leading global authorities in the field of sustainable financing.
– Sustainable finance is no longer a choice for individual investors, but a legislative statute of the European Union. This makes it clear that the future development of companies in Croatia implies complete alignment with the legislative practice and principles of EU law regarding the classification of all investments according to their climate sustainability. Of course, it is not just about laws, but about a long-term shift where such types of investments are not only more profitable but also enable long-term market stability for companies – stated Beslik.
Cybersecurity is an increasingly important ESG topic
As there will be less and less financing that is not sustainable, especially favorable financing, companies will need to understand the principles and rules well if they want to be competitive and survive in the market.
Martina Verić, Director of the Sector for Supervision of Funds and Investment Companies from HANFA, will give a presentation on the expectations of regulators regarding the structuring of investments in the fund industry, considering ESG regulations. At the workshop, the regulatory framework and its forecast will be presented by Ana Zorić, Director of the Directorate for Economy and Financial System at the Ministry of Finance, while Slađana Ćosić, Director of the EIB Office in Croatia, will talk about investing in sustainable business and standards for sustainable financing.
The topic of cybersecurity is also becoming an increasingly important ESG topic precisely because of the growing risk of misuse of infrastructure, networks, and data, and its connection to sustainable business will be explained to participants by Antonija Vojnović, information security team leader from Span.
An interesting panel discussion is also expected, featuring Deputy Governor of the Croatian National Bank Sandra Švaljek, Vice President of Atlantic Group Neven Vranković, Management Board member of Bat Adria Josip Lozančić, and CEO of Intercapital Ivan Kurtović. They will compare perspectives on sustainable investing based on the organizations they come from and their experiences in integrating business strategies with ESG strategy, especially in asset management and the development of products and services.
