Environmental, Social and Governance (ESG) principles can and should become integral to the strategies and business models of the Baltic companies, as their implementation does not only reflect the overall need for sustainability for the benefit of all stakeholders, but already offers wider financing opportunities, helps attract best employees, find new as well as retain old markets and ensure long-term success of a business.
Respective insights were shared by the businesses already practicing ESG, business strategists, investors, bankers and policy makers at the Annual Governance Conference organized by the Baltic Institute of Corporate Governance on Thursday.
“Sustainability should be further embedded into the corporate governance framework, as many companies still focus too much on short-term financial performance compared to their long-term development and sustainability aspects”, noted Valdis Dombrovskis, Executive Vice President of the European Commission, in his welcome address.
The video recording of the conference is now available here.
All speakers were unanimous in that any potential short-term costs that might be associated with ESG implementation fade in comparison to the likely long-term effects of failing to do so.
“Banks and investors note that the financing for non-ESG businesses will continue to decrease; and the same applies to opportunities to attract clients, best employees and partners. At the same time, businesses already implementing ESG emphasize that it should not be regarded as an outside pressure or regulation, but rather as an opportunity. An opportunity that can create a competitive advantage for the company, for the country the company operates in, and for the entire Baltic region”, says Rytis Ambrazevičius, President of the BICG.
For companies only starting to think about environmental and social aspects, advice reitereated during the conference was that everyone can start small and build on it further – from ad-hoc ideas, such as car sharing; to broader roadmaps, such us commitmet to recycling; to full ESG integration into business strategies.
“Change cannot happen at once. But while it starts with a small step and a small team, it has to grow through the company and become a new culture. As it was reiterated during the conference, in terms of ESG, it is not something to be confined to the marketing or even to a dedicated ESG department. One quote that illustrates it beautifully is that it is not about creating a separate strategy for sustainability, it is about creating a sustainable strategy”, says Rytis Ambrazevičius.
Program of the conference: www.governanceconference.eu.