Conference „Business sustainability with ESG principles“

American Chamber of Commerce in Croatia organized the conference “Business Sustainability with ESG Principles” where a new survey was presented, carried out in the last few months by AmCham and Kearney, on the adoption maturity of ESG principles in the business operations of AmCham members. The survey was carried out among a wide range of Croatian enterprises, from large corporations to small and mid-sized enterprises (including micro-enterprises) in various industries. The survey consisted of two parts – a quantitative questionnaire open to all interested companies and a qualitative interview conducted with 20% of the best respondents to gain an in-depth understanding of the issue and an insight into the accuracy of the data.

According to the survey, the top 5 enterprises in Croatia are (in alphabetical order) A1 Croatia, Coca-Cola HBC Croatia, HP-Hrvatska pošta (Croatian Post), Hrvatski Telekom (Croatian Telecom), and JTH Costabella. The AmCham & Kearney ESG Champion 2023 award went to A1 Croatia.

The primary goal of the survey was to assess the current state of ESG maturity in Croatian enterprises and offer valuable insight into the underdeveloped areas and the strategies for their improvement. Every enterprise that took part in the survey will receive an individualized ESG report that will include an overall and a relative assessment of the company’s ESG maturity. These assessments serve as a tool for understanding the current ESG maturity of those enterprises, enabling them to see how they measure up against their competitors in Croatia and giving them an insight into the areas of potential improvements in order to gain a competitive advantage.

Data analysis shows a significant disproportionality between the large corporations and the small and mid-sized enterprises in Croatia with regard to their dedication to sustainability, especially in emission monitoring, waste management, and water preservation. Large corporations have a more active ESG involvement and a higher degree of ESG maturity, which is evident from their achievement of emissions targets and meticulous footprint monitoring.

In conclusion, Croatian enterprises are taking commendable steps in their dedication to ESG principles. However, there is room for improvement and advancement in specific sectors of the business community. For example, the majority of large enterprises are implementing non-holistic ESG strategies that focus only on one aspect of ESG. In order for Croatia to grow in its ESG journey, it is imperative to harmonize the sustainability principles and deeply embed the ESG considerations into the business strategies of companies and, more importantly, into the implementation thereof. Such a holistic approach will be the key to promoting the sustainable future of the Croatian economy.

Slaven Kartelo, partner in the Audit and Accounting Advisory Department, PwC Croatia, spoke in detail about non-financial reporting, an important issue with regard to ESG implementation.

The introductory statements and the presentation of the survey results were followed by a panel discussion. The participants of the panel discussion were Ana Zorić, the Director of the Directorate for Economic Affairs and Financial System, Ministry of Finance of Croatia; Martina Pattiera, Chief FI and Sovereign Risk Manager, Raiffeisenbank Croatia; and Nataša Mikuš Žigman, the Director of the Business Sustainability and Green Transformation Sector, Podravka.

The panel discussion featured, among other things, the topic of ESG principles application practices, and the adaptation of the business sector to the adopted legislation, the obligations of Croatian enterprises, as well as the future impact on business practices.

The participants of the event agreed that, on the one hand, ESG creates new business opportunities, but on the other hand, there are still numerous challenges that enterprises face with regard to its implementation. They consider it imperative for a successful transformation that ESG become part of an enterprise’s identity, deeply ingrained in their DNA and corporate culture. There was some reflection on reporting as well. The conclusion that was reached is that a new reporting framework is a big step forward due to the standardization of information that offers the possibility to compare and assess enterprises with regard to both making investment decisions and buying products. Among younger consumers in particular, there is a noticeable trend of choosing products and companies that care about sustainability. Reporting, however, should not be an end in itself but a result of past efforts. The event participants agreed that while sustainability may involve immediate costs, it should still be incorporated into the business model due to the long-term competitive advantage it offers.

“The implementation of the CSRD Directive, or the Corporate Sustainability Reporting Directive, which will give us standardized information about the sustainability of companies required to publish their reports, is an important step forward. It is necessary to keep in mind, however, that reporting is not an end in itself, but a basis for a better dialogue and communication with all the stakeholders, including the financial sector,” Ana Zorić, the Director of Directorate for Economic Affairs and Financial System, Ministry of Finance of Croatia, concluded.

The event was attended by more than 120 people from the public and private sectors alike.