ESG is not just a passing fad

According to the participants of the “ESG factors - sustainable business growth” panel, although interest in ESG issues - environmental protection, social responsibility and corporate governance - is to a large extent stimulated by current trends, it will result in permanent changes in business.

As Dorota Macieja, member of the management board of PZU Życie, pointed out, the interest in ESG is somewhat reminiscent of the internet bubble of 2000-2001, when the mere announcement of going online could boost the company’s value

It took years for companies and investors to discover the actual benefits of online operations. The same may be true of ESG - although it does not guarantee success, including it on the agenda may make it easier for business to achieve it. The PZU Group has decided to include an ESG strategy for the first time as part of its broad new strategy for 2021-2024.

Wojciech Hann, President of Bank Ochrony Środowiska, agreed with the accuracy of the comparison between the current interest in ESG and the former internet boom, pointing out, however, that there is no doubt that ESG will involve a grand and irreversible process of changes. The leading global and Polish companies have already noticed this. - It is obvious that companies who fail to take into account the ESG factors will end up in the second or third league of business - warned the president of BOŚ, adding that it is high time to stop asking whether ESG is profitable or not, and start thinking about the best practices in this area.

Profits and values

Irena Pichola, a partner at Deloitte Advisory, who has been dealing with ESG issues for 20 years, stressed that it is the first time that we are seeing such a strong focus on this matter. This is partly due to regulations, party to growing public awareness and partly to large investments planned in the area of sustainable development.

Professor Waldemar Rogowski from the Warsaw School of Economics, who chaired the debate, recalled that two years before the pandemic, the head of the world's largest investment fund Black Rock announced that he would not invest in companies that do not comply with ESG principles.

Piotr Dmuchowski, head of HSBC's market department in Poland, pointed out that 60% of long-term research conducted around the world shows a positive correlation between the commitment in ESG by companies and their stock prices, which is even more evident from a long-term perspective.

And while ESG may be considered a current trend, better performance of companies that take into consideration these issues while planning their business strategy compared to those who fail to do so, is a strong argument for the prediction that this trend is likely to become a long-term standard.

According to Mr Hann, involvement in ESG should not be considered from the perspective of higher returns on investment, but its overall importance. Profitability should be treated as a result, not the cause for investing in ESG.

Companies that incorporate these issues into their strategies and operations are convinced of the positive impact of ESG. Marta Mikliszańska, head of PR & Sustainability Department at Allegro.pl, observed that CSR has been part of the company's strategy for years, but after Allegro.pl went public it has been transformed into ESG.

The change stems from the expectations of investors. For this reason, the ESG report recently published by the company differs from the company's previous CSR reports. - The idea itself remains the same, but we had to change its language to make it more comprehensible to investors - explained Ms Mikliszańska.