Three indicators of sustainability – environmental protection, social responsibility and governance (ESG) – have a significant and positive relationship with the market value of companies’ shares in Norway and the Baltic countries. According to Barbora Dulkytė, an alumna of the ISM “Business Sustainability Management” master’s studies who conducted the study, this is an important conclusion that also confirms the conclusions of studies conducted in other countries.
According to B. Dulkytė, sustainability is often viewed ambiguously in society. There is either a very strong belief in sustainable living or sustainable business, or a skepticism. However, A. Dulkytė says that delving into this area helped to understand that sustainability is multi-layered.
“And this, of course, is a very important priority both at the global and national and corporate levels,” says A. Dulkytė.
For his part, Dovydas Šakinis, SEB Bank’s Head of Sustainability Data in the Baltic States, researched the factors that most help and hinder the implementation of sustainability data accounting. D. Šakinis investigated the real situation at his workplace and aimed for the findings of the research to be useful both academically and for the organization where he works. This is important because quality data is very significant not only for sustainability accounting, but also for making financial and strategic decisions of the organization.
“The bank itself leaves a very small direct carbon footprint, but it finances the activities of many companies of various sizes and therefore requests the necessary data,” says the interviewee, adding that the main obstacle in carrying out sustainability data accounting is data quality and their (in)availability.
“Banks, in direct communication with customers, encourage them to properly collect, process and present sustainability data. However, the quality and availability of company data is one of the biggest challenges for banks,” explains D. Šakinis.
According to the interviewee, the European Central Bank, which regulates banking activities, instructs to disclose financed carbon dioxide emissions, as well as to set goals and reduce financed emissions by a certain percentage by the agreed year. Thus, the goals are tightly regulated, specifying what they can be and how they can be achieved.
“The first step for the bank is to count the issues to be financed, and then to name the goals and move towards those goals while forming and implementing its business strategy,” says D. Šakinis, who graduated from ISM’s “Business Sustainability Management” studies.
B. Dulkytė adds that companies have more than one reason to choose sustainable activities – not only because of the requirements of important institutions. The researcher identifies four main reasons why companies engage in sustainability initiatives. The first is, of course, related to climate change. Second, the expectations of interested parties, such as investors, shareholders, customers, regarding relevant company data and reports are growing. Another reason is regulatory expectations for sustainable operations, which are also growing.
“The last, but not the least important, is the financial motive. This is the increased financial profitability and financial return of companies related to business sustainability. But there is also a non-financial motivation. It’s the company’s reputation. It shows how the company is valued in society,” the interviewer explains.
Thus, companies have many reasons to link their activities with sustainability goals, but it is equally important to properly collect, process and present quality data in sustainability reports.
Tags: study Focus sustainability increases corporate businesses lack quality data
