The adoption of ESG criteria is one way road for listed companies who should see it as an opportunity to strengthen their competitiveness. At present, the majority of companies are in the first stage of this adjustment, said Vasiliki Lazarakou, president of the Hellenic Capital Market Commission and member of the Management Board of ESMA, in an interview with Business Daily.
Lazarakou points out that Greek listed companies are tuning in more and more into the importance of investing in ESG assets.The ESG criteria, emphasizes the president of the Hellenic Capital Market Commission, form a new reality in investments. Lazarakou calls on Greek companies to formulate their strategy properly in order to become competitive and innovative in the long run, focusing on green investments.
She also emphasized that the adoption of ESG criteria is necessary to attract investment in the new environment, noting that the assets invested in sustainable financial products in Europe will triple by 2025, reaching 7.6 trillion euros.
- After 10 years of crisis, how ready are Greek companies to adapt to strict ESG criteria?
The integration of the ESG (Environment-Society-Governance) criteria is the only way for the listed companies in Greece and in Europe, given the European Green Agreement and the funds that will be allocated for the transformation of the European economy. It is not an option but an obligation for a company that aims to thrive in the new economic environment.
That is why Greek companies must see it as an opportunity. Opportunity for long-term strategy planning that will strengthen their competitiveness. At present the rules for the ESG criteria are mainly relevant to large companies but it is also crucial for smaller companies to realize their importance. It is worth noting that on the issue of governance and given that there are currently no uniform rules worldwide, national initiatives are important and Greek listed companies that have adapted to the new law on corporate governance have incorporated governance criterion.
- How well staffed is the Greek business community to meet the requirements of the ESG criteria, in a globalized environment, given the brain drain of the previous decade?
The country, despite the brain drain caused by the crisis, has sufficient human resources. I believe that the Greek market is adequately staffed with experienced executives who can assist in the effective integration of ESG criteria in the companies' strategy. The reversal of the brain drain trend depends mainly on the development of the Greek economy and the employment opportunities that exist and those that will be created.
Our economy is moving in this direction and I note that the European Commission on November 11 announced that the growth rate of Greece is 7.1% in 2021 and in fact the country has the third best performance in the Eurozone countries, while estimates for 2022 is 5.2%. As for the stock market, it should be mentioned that more than 6 billion funds have been raised so far, while this year alone the EC has already approved 20 prospectuses for capital increases or for the introduction of corporate bonds on the ATHEX. It is obvious that the economic climate in Greece is changing.
- The structure of the Greek economy features a very small number of large enterprises and many small and medium enterprises. How ready are the latter to meet ESG requirements?
Smaller companies are not ready yet and it is not required at the moment, always according to the legislation. In fact, according to European legislation, large listed companies (more than 500 people) are required from 1.1.2022 to disclose, gradually, data on the manner and extent to which their activities are related to economic activities that are characterized as environmentally sustainable according to the Classification Regulation. Also, according to the Proposed Directive on Corporate Sustainability Reporting (CSRD) large EU companies and all listed companies (except listed small companies) will be required to report based on standard reporting and external auditing standards. On the contrary, under the draft Directive (CSRD), the regulatory requirements for listed SMEs in relation to ESG issues will apply at a later stage given the financial difficulties they face as a result of the COVID-19 pandemic. Based on today's Directive, in fact, the sustainability standards for smaller companies seem to be simpler.