Opening the event, the BPCC’s chief advisor, Michael Dembinski, harked back to simpler times when all that was expected of a business was to make money for its shareholders. “The past 40 years have seen a rise in corporate conscience – firms need to be seen to be doing the right thing – by their employees, their customers and their shareholders, this means above all doing right for society and for the environment. Today’s CEOs have to find a balance between delivering growth and profitability on the one hand and taking care to ensure their business does not do harm to people or to the planet on the other.” Expectations regarding ESG from regulators, investors, financiers and business partners are rising from year to year. Every market player should be aware of how to prepare the business for the ESG era; it is something far more than compliance and box-ticking.
PwC’s annual CEO survey showed a much-expected trend this year, with CEOs from across the CEE region falling into line with their peers from the rest of the world when it comes to how worried they are about climate change, with 63% describing themselves as being either ‘extremely’ or ‘moderately’ worried. ESG is now among their top three challenges, along with cyber and health. In the past, there was a glaring gap between this region and Western Europe and North America when it came to appreciating the climate imperative; COP26 has helped to shift their attitudes. In this year’s survey, only 30% of CEOs from the CEE region say they have ‘no commitments’ to an ESG programme.
ESG is becoming an integral part of a company’s business strategy, and should be woven into its DNA.
Agnieszka Gajewska, PwC’s global government and public-sector leader, and the ESG leader for the CEE region, said “Business is no longer just about creating shareholder value; it is about keeping on the good side of the regulator and responding to ever increasing pressure from the customers and communities they operate in . Emissions reductions are one of the critical goals, and businesses want to be seen to be doing their part.”
Ewelina Łukasik-Morawska, a manager in the Regional ESG Hub practice at PwC CEE, introduced the EU’s Green Deal, with its emphasis on the circular economy and the ‘green taxonomy’ – a way of determining which actions and technologies are truly green enough to merit EU funding. Ms Łukasik-Morawska mentioned the importance of supply chains, and the risks that companies face when they cooperate with partners with poor social or environmental practices.
The ‘S’ in ESG is increasingly important in an employees’ job market, says Agnieszka Rogowiec, manager in the Regional ESG Hub at PwC CEE. Young people want to work in a diverse workforce, for an employer that is conscientious when it comes to society and the planet. “Companies with strong ESG credentials have better employee acquisition and performance than those without. ESG leads to lower costs of recruitment and retention,” she said.
Participants in the webinar heard several case studies of corporates that have saved millions – even billions – of dollars by successfully implementing waste-reduction programmes. And yet the bottom line of ESG is that by giving employees a sense of purpose beyond their pay-packet, their engagement and productivity is shown to rise.
The webinar touched only the tip of the ESG iceberg, setting out the scope of the subject and how it impinges on so many facets of business. This is clearly a mainstream trend that will sooner or later affect all companies, big and small; the best way to tackle ESG is to embrace it wholeheartedly rather than seeing it as a compliance cost, something necessary to keep the regulators at bay.
The full presentation is available below:
The recording can be watched by clicking below.