Sustainability will play an important role in the recovery of companies, study shows

The role that sustainability has in the development strategy of companies is starting to become better defined at the management level, whether it is about managing the general impact that the company’s activity has, or about creating long-term value for stakeholders. According to a study conducted by EY Romania, 80% of respondents say that the integration of sustainability in the decision-making process has a long-term impact on operational performance.

Regarding responsible investments, based on criteria related to environmental, social or corporate governance factors (ESG factors: environmental, social and governance), the business environment representatives do not predict a substantial change for the Romanian market: almost half (49% ) of respondents expect a minor increase in sustainable investment, and 18% say they cannot estimate what will happen after the COVID-19 epidemic with this type of investment.

“ESG factors and long-term value can be considered two sides of the same coin, they are interdependent. The world is changing, and these changes can quickly affect the business environment, as we have seen recently. It is important for companies to understand that the inclusion of the principles of sustainability in decision-making processes can help to create a competitive advantage, while responding to pressure from stakeholders to adopt social responsibility practices. Accepting this trend will involve a series of changes in the organizational culture, in the existing processes and technologies, but, in the long run, these efforts can lead to the creation of new opportunities, to the improvement of performances, but also of the company’s reputation,” said Laura Ciobanu, Manager, Climate Change and Sustainability, EY Romania.

According to the EY survey, almost 74% of respondents say that integrating sustainability principles into business strategy and operations management is a priority for the companies they represent.

More than 43% of responding companies with less than 500 employees already report non-financial issues. In the category of enterprises with more than 500 employees, 85% of the responding companies publish a sustainability report / non-financial statement, given that they meet the mandatory criterion.

About 80% of respondents believe that environmental, social or corporate governance factors are taken into account when their companies make decisions regarding operational management and investment strategy. 10% state that ESG factors are not an important element on the strategic agenda of the companies they come from.

In the context of the new pandemic, the most important ESG factor considered by respondents is “health and safety at work”, being a priority for almost three quarters of decision-making professionals in companies.

The following places of importance are “decision-making transparency” (40%), “energy efficiency” (29%) and “the overall impact of companies’ activity on the environment” (27%). The last places are “environmental and social assessment of suppliers”, “freedom of association of employees” and “protection of biodiversity”.