What is ESG? The balance between profit and sustainability
A business that brings value to investors and society as a whole. This is a brief introduction to the concept of ESG in the investment sector. But what exactly is behind this acronym? And what is our attitude towards the ESG phenomenon?
What is ESG ?
ESG stands for internationally recognised criteria (environmental, social and governance) under which companies commit to reducing the adverse impacts of their business on the environment around us. ESG criteria are used to assess the sustainability and ethical impact of an investment or business.
What is our approach to ESG?
Under the Paris Agreement, EU countries have committed to achieving climate neutrality by 2050. For the time being, the obligation to report on sustainability-related activities applies only to large companies, but will eventually apply to all entities. We want to be ahead of the curve, so we commissioned an analysis from the renowned CBRE to serve as the basis for our own ESG strategy, which we will report on regularly. We will gradually publish all our ESG activities on our website.
We believe that capital appreciation can be achieved in a socially responsible way, taking into account not only financial indicators, but also environmental and social aspects. It is the ESG parameters that provide information on how the Group is prepared to face future challenges and opportunities. We have therefore decided to reflect the ESG principles in the Company's strategy, which will present clear and structured view of the Group's vision in achieving sustainability with well-defined, measurable goals. Their achievement will then be the subject of annual reporting.
E is for environment: our approach to the environment
The environmental aspect of ESG focuses on how businesses and investments affect the natural ecosystems. This includes a company's impact on the climate (e.g. the burning of fossil fuels), as well as preparing for the changes that warming will cause. In addition, the first segment looks at the sustainable management of natural resources (focusingon water, waste recycling, efficient use of raw materials and materials, or the impact of activities on biodiversity). Investors and businesses that take environmental criteria into account aim to minimise negative environmental impacts and promote sustainable practices.
S for social: The social context of our work
Satisfied employees with good relations with each other are the basis of any company's operation. What we mean is company’s culture with an impact on its stakeholders, with whom they cooperate with This includes, for example, various suppliers, tenants, clients or consumers. It is through mutual dialogue that we contribute to a win-win situation.
G is for Governance: how we look at corporate and investment governance
The governance aspect of ESG deals with the management of businesses and investments. It addresses, for example, transparency and accountability of management, ethics and integrity, risk management or regulatory compliance. All risks and opportunities must have a coherent framework. It must be clear how they will be evaluated and how they will translate into investment decisions - whether buying, managing or selling. This also entails transparency to investors, banks and the public, which is key to monitoring progress.
We believe that meeting the ESG criteria will have a positive impact on the environment, society and overall quality of life.
Interested in learning more about how ESG translates into practice? Read our other articles. For example, the retail park VORUM Voitsberg generates as much electricity as 278 households consume in a year with a photovoltaic power plant (PV).