European companies consider that a commitment to sustainability guarantees long-term revenue growth, and that a sustainable product can bring as much as 23 per cent additional revenue, with consumers increasingly choosing brands and products of this kind. Despite the fact that prioritising this area can lead to reduced costs and significant savings, ESG awareness remains lower in Serbia than in EU member states, though positive trends in this area also exist in our country
These are just a few of the conclusions of a study conducted recently by international consultancy Horváth, which specialises in consulting services in the field of ESG [Environmental, Social, and Governance]. The study included the participation of 35 European companies, from Switzerland, Germany and Austria, that employ more than a thousand people and, in most cases, generate annual revenues exceeding three billion euros. The study also confirmed that sustainability actually represents one of the biggest challenges, particularly in terms of setting, defining and measuring ESG targets.
Robert Ćuzela-Piljac, Horváth Business Development Manager for the Adria region, explains that, unlike EU countries, Serbia still has no requirements pertaining to this area, like CSRD and EU classifications.
“Regardless of the fact that implementing ESG principles contributes to competitive differentiation, reduced costs and the creating of new market opportunities, awareness of this topic is lower in Serbia compared to European Union member states. Nevertheless, companies that export goods and/or services to this market attach great importance to ESG, and many of them have already implemented various initiatives and activities in this field. One of them, for example, is to appoint a staff member to deal exclusively with this topic. They focus on renewable energy capacity building and implementing required ESG reporting in accordance with deadlines defined by the EU,” notes Ćuzela-Piljac.
However, existing regulations are interpreted and understood differently by many people in the region, which is why they require support when it comes to harmonising the reports. This is precisely the kind of assistance that’s provided by consulting company Horváth.
We assist clients in defining and implementing an ESG strategy, thereby helping them gain an advantage over the competition
“Serbian companies that define their own ESG strategies must show their clients, employees, business partners, investors and other interested parties how measures are implemented and targets achieved, but also how they position themselves, in these terms, within the scope of their operations,” considers Ćuzela Piljac.
Those companies that have implemented ESG in their operations are on the whole focused on two activities: reporting in accordance with EU guidelines; and investing in renewable energy sources, which has a fast and direct impact on carbon footprint reduction. Almost 70 per cent of participants in the Horváth study had set themselves the goal of being carbon neutral by 2030. Ćuzela-Piljac stresses that a successful green transformation can only be implemented holistically, with the integration of all sectors and with clearly defined targets and plans.
“The basic steps that we advise every Horváth client to take are to identify the most appropriate response to ESG requirements, define an adequate strategy, targets and measures, and integrate this concept into all organisational processes. An understanding for sustainability must be installed at the very heart of operations, the consequence of which is the developing of a sustainable mindset among employees, and this is precisely what guarantees longterm competitiveness and profitability,” emphasises Ćuzela-Piljac.
In other words, one of the key factors is for ESG to become part of the corporate culture, as well as to initiate timely steps that provide companies with the opportunity to achieve a market advantage over their competitors.