Serbian companies must show their clients, employees, business partners, investors and other parties how ESG measures are implemented and the goals that they achieve, as well as how they position themselves within their activities in these terms.
As someone who hails from a consulting company that specialises in ESG strategy and performance consulting, could you explain why companies need to engage in sustainable transformation?
― Sustainability is a strategic priority for management across industries, with widespread maturity in ESG. This is a clear finding of multiple Horváth studies developed over the last three years. Over 82% of the participants in our CxO study see the integration of sustainability as a critical success factor.
We always emphasise that this process is not a sprint, but rather a path of endurance that requires the integration of ESG in four key elements: Strategy & business model; Steering system; Processes & value network; and Organisation & corporate culture. It extends beyond regulation and companies should take a holistic approach to tackling sustainability. Our recommendation is to define sustainability aspirations early on, keeping in mind that performance management is an important aspect for creating sustainable value.
It is important to stress here that the implementation of sustainable business is mostly expected by consumers who are increasingly seeking such products and services. Over 60% of participants in our study anticipate a sustainable product portfolio opening new markets and potentially increasing revenue by an average of 23%. Significantly, 40% of participants anticipate a sustainability-driven cost reduction of up to 7%.
How would you evaluate the situation in Serbia and across the region when it comes to the development and introduction of ESG standards?
― For our clients in the Balkan region, we recognise that stakeholders act as drivers of sustainability. Consumers’ purchasing decisions are increasingly influenced by sustainability concerns, so companies need to be prepared for this development and create transparency. The transformation to sustainability is frequently driven by employees, so from within the organisation itself. The capital market also plays a role – shareholders and investors demand binding sustainability efforts.
The implementation of sustainable business is mostly expected by consumers who are increasingly seeking such products and services
General awareness of this topic is lower in Serbia than it is in the EU. Nevertheless, companies that export goods or services to the EU attach great importance to it, as demonstarted by the appointment of dedicated employee( s) who deal exclusively with this topic. I believe that Serbian companies must show their clients, employees, business partners, investors and other parties how ESG measures are implemented and goals achieved, as well as how they position themselves within their activities in these terms.
What is essential for a company conducting a business transformation to become more ESG oriented?
― At Horváth, we advise clients identify the most appropriate response to ESG, define an adequate strategy, goals and measures, and that they fit this concept into all organisational processes. The understanding of sustainability must be placed at the very core of business, which consequently develops a sustainable employee’s “mindset”. This is the guarantee of long-term competitiveness and profitability. From our experience, data collection is the most significant challenge when it comes to implementing the CSRD and EU taxonomy. Companies should therefore focus on estimating data availability and defining processes and responsibilities early on.
