Sustainability: A Good Business Case
Contributors:
Iulian Harpa – Managing Partner, HIM Public Affairs
Daniela Vasilescu – Finance Director, HIM Public Affairs
Raluca Alexie – Project Lead, HIM Public Affairs
Ioana Stalpeanu – Marketing & Communications Manager, HIM Public Affairs
Sustainable development has been defined by the United Nations as development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
“Is it not something pertaining to the corporate citizenship and CSR? I think we had a team dealing with this in the Communication Department…”
Well, not anymore. As the global threats to the stability of the environment, business, political and social climate multiply, the question of “Will we be able to do business successfully next quarter/next year/next 5 years” is gaining relevance. Having a structured professional approach to these questions is an act of good stewardship to our businesses and communities, important for all our employees, partners, customers, and financing partners. We are seeing sustainability obligations in credit contracts, alongside with the launch of climate and sustainability centred capital investment funds.
This is why we are bringing in front of you a quick look at the sustainability field, together with our strong call to action.
Becoming sustainable and supporting the global SDGs requires some effort organisationally and financially but it is a very good business case as well, by the new business opportunities it creates.
The sustainability technical orientations adopted by the European Commission are integrated in all public funding support programs launched starting March 2022, amongst which the mandate to dedicate significant portions of the investments to climate change mitigation, the mandate to integrate accessibility and non-discrimination assurance and the environment protection in the projects design.
How can we go about a sustainable transformation of our business without ending up overwhelmed and not sure about the outcomes?
It requires an integration of the concept with the company’s medium-and long-term strategy. Some strategies might be already included, by the mere focus on new green products and services, or the company’s aim at rationalising its resources utilisation.
An effective sustainability approach is a continuous process which starts with an organisation wide look at the material sustainability aspects of the company’s business model. This reflection should go beyond the immediately apparent topics, to take an example from the energy sector, not only producing energy with less CO2 emissions per MWh (UN SDG 13 Climate action) but also as a large employer perhaps, ensure fair and equal pay (UN SDG 10 Reduced inequalities) or a responsible land footprint (UN SDG 15 Life on land).
For most listed companies in Romania, non-financial reporting is a matter of compliance, as they do not have integrated the financial strategy with the non-financial one.
Also, very few companies consider this to be an opportunity to present their sustainability strategy and the impact of their long-term development.
Some of the best practices in terms of sustainability reporting within the energy sector in Romania, based on the public information, are:
- OMV Petrom – Ranked in the top 3 of the oil and gas producers’ industry in Sustainalytics’ ESG risk assessments in October 2021.
- E.ON – The sustainability report of the E.ON Group in Romania reflects the non-financial performance of all E.ON companies and was made out of the desire to increase transparency towards all stakeholders and to improve the company’s governance.
- CEZ – Published in 2021 their 5th sustainability report, which highlights the successes and challenges of 2021 and pursues a natural transformation as a team.
- Romgaz – Published in 2021 their 5th report too, ‘Energy for a sustainable future’, which addresses the relevant issues within Romgaz Group regarding their economic, social, and environmental performance.
Best practice is to elaborate the sustainability report in line with the GRI[1] Standards – the world’s most widely used standards for sustainability reporting. We would like to mention that HIM team is certified by GRI to undertake sustainability reporting and has relevant experience in sustainability projects.
The key stage of a sustainability report is the materiality analysis which identifies the economic, environmental, and social aspects on which the company has a significant impact, as well as those aspects that arouse a special interest from the company’s relevant stakeholders.
Companies are much better prepared to address social, wage and human rights issues, with codes of ethics, remuneration policies for all employees, supplier audit policies, and anti-corruption and anti-bribery policy. By contrast, only a small percentage of listed companies take a systematic approach to climate and environmental issues, most of which do not have a proper environmental strategy.
Besides being a process to follow, sustainability is a matter of business education that should be conducted top-down, from top management to every single employee.
Having a sustainability approach is not only for the large players.
Even the smallest business can get impacted by a disruption in the supply chain or a jump in energy prices – therefore we all need to adopt the sustainability mindset. What we need to do in fact is to rethink our risks and opportunities matrix, using the tools that the sustainability concept puts in our hands.
Even if not all companies will find it efficient to maintain specialised departments or personnel, investing in the existing team’s awareness regarding the sustainability of the business, generating the internal conversations around it, get some external help and build a strategy, can be done, nevertheless. As tools for metrics measurement and reporting, there are new innovative solutions being built by Romanian entrepreneurs supported through Norwegian Funds – which will be available for everyone to use.
Making sure your business is sustainable and does not do a significant harm to the environment, or the society, can be achieved without breaking the bank and while discovering some nice business opportunities along the way, notwithstanding the opportunities to get financed by the many programs getting launched in the 2022 – 2027 financing cycle.
And because previously we talked about the companies that annually report their non-financial activities, we would also like to specify the ways in which we believe they should promote this, in a sustainable way. Digital Marketing is one of the most appropriate tools for promotion and public awareness regarding sustainability.
Having internationally recognized certification from the Digital Marketing Institute and, implicitly, expertise in new sustainable promotion methods and technologies, we always recommend to our clients, marketing and communication campaigns that use only sustainable strategies.
Moreover, on their way ensuring growth and long-term sustainability, every company could extend public awareness through Digital Marketing tools and techniques. Every brand which has sustainable, ethical products or services and eco-friendly practices should make public its actions, to raise the public awareness regarding sustainability.
Digital Marketing is for sustainable growth and even the content could be eco-friendly!
As we see all the above elements as being intrinsically linked (sustainability, risks, opportunities, public conversations and messaging) we recognise the novelty of many of them and the need to continue the conversation, at a scale that should be as wide as possible and to which all of you are invited to join.
[1] GRI (Global Reporting Initiative) is the independent, international organization that helps businesses and other organizations take responsibility for their impacts, by providing them with the global common language to communicate those impacts.
