Special edition newsletter
ECONOMICALLY ECOLOGICAL - Green is the new black
Biljana Braithwaite, CEO and founder of Sustineri Partners: Introducing ESG principles is inevitable, but also investment in future
Biljana Braithwaite (Photo: ekapija)
Through the conversation with Biljana, we tried to bring some new perspectives and answers to the increasingly popular, but still very vague and confusing topic of ESG standards, and whose introduction is no longer a matter of choice, but of smart business.
- It is crucial that states begin to consistently implement their own laws, which already provide an excellent framework for applying these standards in many areas. For instance, illegal logging is a criminal offense, while the gray economy should be effectively detected and sanctioned by inspection authorities. These occurrences have become common in the region, but they are significant obstacles to development in all aspects. The consequences are huge and the citizens themselves feel them the most. The recent floods in Bosnia and Herzegovina have reopened the issue of uncontrolled deforestation, which contributes to increasingly frequent floods and landslides. The gray economy deepens the problem of stagnating the economic development of countries in the region, which, again, mostly return to citizens as a burden and violate their basic socio-economic rights - emphasized Braithwaite.
- Investors are interested in the region, but what deters them the most from serious investments is legal uncertainty, particularly visible in the numerous cases of impunity for serious corruption cases, as well as lengthy bureaucratic processes that discourage them from setting up their businesses here. All of this adds to the perception that, even though the region has a lot to offer, from natural resources, be it tourism or other potentials, to highly educated professional staff - The Western Balkans is still not ready to attract serious investments - she explains to us.
She also adds that when it comes to small businesses, complying with some of these standards is very easy for them, just read what the law says and do it that way. Respect labor rights, don`t pollute the environment etc., those are the basic guidelines.
- When it comes to "dirty" energy that we get from the system, there, companies do what they can through e.g. solar panel installation, but to a certain extent we have to rely on the system itself. The state`s obligation is to first create an appropriate legislative framework, and then to, if necessary with the help of international partners who are present and ready to provide support, facilitate the implementing and implementation of the green transition. We often hear from the EU, EBRD and IFC that we failed to withdraw the funds allocated for projects, because we don`t have the capacity to properly prepare these projects and align them with their requirements - underlines Braithwaite in a conversation for eKapija.
Adapt to the needs of the company or not everyone needs everything
Furthermore, she tells us, if the client hasn`t integrated the agenda, doesn`t understand it and doesn`t know it enough, the first thing to consider is what is relevant to its industry.
- Different sectors have specific needs and challenges. So, what is relevant for a company in the metal industry, for example, will not necessarily be necessary and relevant for a company in the IT sector. At the beginning of the ESG strategy development process, it is crucial to first assess what the company is successfully applying and what good practices have already been integrated into its operations. In some cases, the company may already have exceptional practices which should be recognized and presented through the report, and included in the broader strategy. However, this process often points to fields that were not the subject of attention, and which are key to further growth and development. That`s where we come to strategy that should not only include those unaddressed aspects, but take into account the bigger picture - including competition, ambitions to expand into new markets, as well as long-term sustainability plans. Also, keep in mind that this is not a one-time process, since rules, regulations and business requirements are constantly evolving, changes that the ESG strategy itself should definitely follow.
Therefore, she adds, we are not someone who will create global policies, we will fit in and follow them.
- We know the consequences of global warming if the temperature rises by three degrees by the year 2100, 2.5 degrees or 2 degrees, in combination with other ecological factors. We need to work globally to reduce emissions, and this will be done gradually. When it comes to CBAM, the framework is set for 2026 and it`s clear what to expect. The carbon price will already be higher in 2027, and in 2028 even bigger, and then the inclusion of other industries will be considered. We don`t have much time to achieve a collective reduction in our carbon footprint which is necessary to mitigate global warming and avoid critical situations such as the `tipping point` of Amazon. Because, if that system collapses, we are all at risk - says Braithwaite.
The state needs to create a threshold
But it is just as important to warn, Braithwaite continues, non-acceptance of ESG standards is no longer an option. Businesses that fail to adapt are at risk of being left behind, dealing with reputational, regulatory and financial risks. Time to recognize this opportunity, as it will shape the future of our business.
For all that, those who are wiser, who know how to recognize that this is inevitable, they also understand that it is an opportunity.
- Companies can no longer view compliance with ESG standards as mere ticking of boxes. Instead, they must understand that this is first and foremost a basic threshold that qualifies them for the market at all, which at the same time opens up the possibility to stand out from its competition. When investors evaluate multiple companies that all meet ESG requirements, the question arises: why should they decide to invest in you? There lies the added value of the ESG approach. Our goal is to help clients not only meet these standards, but rather to find ways to innovate and provide added value that differentiates them from the competition.
(Photo: Media Biro)
More and more often, you will have situations where you come to the bank and need some funds, so they tell you "and you don`t have that, so that`s an even higher interest rate, and you don`t have that either, and then it will be even a little bit higher" and you end up paying twice as much capital.
In the future, banks will tell some clients - "We can`t finance you at all anymore", they will tell others - "we can help you if you have made a transition plan", some will go in that direction and help retain the client, they will provide expertise to work on that plan. When we talk about green loans, e.g. there are not enough of those in the private sector who can meet the requirements. But, if the state creates a threshold, then everyone will have to move, which is in everyone`s interest, and if the state does not create that threshold, then you have inequality and no fair play - Biljana Braithwaite points out.
- We can`t afford to lose it. ESG is not just a task to be checked off; it`s how we build more resilient companies that can overcome future challenges, whether they are regulatory, financial or environmental. Companies taking bold steps today, will be the ones that thrive tomorrow. We must face the reality that the global ESG landscape is rapidly changing. If we wait, we risk falling behind. But if we embrace this moment, we can turn challenges into opportunities, opportunities for innovation, growth and building a sustainable future for all of us - Braithwaite says.
Senka Trivić
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