Issue link: https://maltatoday.uberflip.com/i/1472276
maltatoday | SUNDAY • 3 JULY 2022 13 OPINION Values create value IN a post-pandemic recovery threatened by the disruptions of the Russian war in Ukraine, our economic operators need to accelerate their efforts to ensure the long-term competi- tiveness of their enterprises. This was my main message during an ESG conference or- ganised by the Malta Chamber. An event which once again highlighted how the collabora- tion between a business-friend- ly government and ethics-driv- en industries can effectively enable the transition towards greener business models. An indispensable element that will shape the future of the Maltese economy. Our corporate mindset needs to be consistently anchored around the creation of better value in everything we pro- duce, in every service or prod- uct we propose to our domestic and international customers. This drive for higher added val- ue will improve our competi- tiveness as an agile economy in the wider European and global context. It is very positive to see that the pandemic itself accelerated the global consumer attention to the broader impact of com- panies on the environment and on the social development of the communities in which they operate. This is being coupled by our national ambition to achieve a climate neutral econ- omy in the next three decades. This will not happen on its own steam. Yet the cost of doing nothing will be much heftier than the investment needed to guarantee a viable financial fu- ture for our enterprises. Our policy is to incentiv- ise and provide tangible sup- port for Maltese companies to invest in their own com- petitiveness. To embrace the notion that long-term value and growth can actually be achieved through environ- ment-friendly investments and a genuine commitment to the quality of life of workers and citizens underpinned by solid corporate governance. This is what ESG is all about – investing in the future of our companies to ensure that they can do well for their sharehold- ers whilst doing good for the broader community. I am indeed encouraged to see that more Maltese executives, business leaders and investors are realising that a genuine commitment to values such as environmental protection, the social progress and corporate governance can translate into monetary value via improved competitiveness and sustaina- ble growth for their companies. This is happening in practise as ESG committed companies are able to attract a virtually untapped market of consum- ers and other businesses which are becoming ever more sensi- tive to their impact on climate neutrality. Furthermore cost reductions through clean en- ergy projects and other green projects have a direct positive impact on profitability. These companies are also seen positively by banks and financial intermediaries which are seeking to diversify their loan and investment portfoli- os into such companies as they get in line with ESG-related fi- nancial regulation. On top of all this, companies which embed such social and governance practices in their decision making are register- ing an uplift in productivity through a stronger employee retention rate and a higher lev- el of employee commitment. This is indeed already hap- pening in our own business community: those companies that provided the best returns to their shareholders in the last three years generated a third less carbon emissions com- pared to a cohort of some of the largest Maltese companies. These companies also managed to cut by half their water con- sumption and generate 80% less waste compared to their peers. These businesses are return- ing better returns to their shareholders as they invest in their workforce through upskilling and fairer oppor- tunities for all. Compared to a national gender-pay gap of 10%, companies with better financial results have an aver- age pay differential of just 2% between their male and female workforce. This is also reflect- ed by a better representation of women in the management po- sitions, which for these compa- nies stands at 37% - 3% higher than the European average and almost 10% higher than other Maltese companies which par- ticipated in the first phase of our ESG initiative. When corporate decisions are embedded in values, financial objectives can still meet the common good. Targeting pros- perity through environmental and socially conscious business models is the model of the fu- ture, and this is the direction we will continue taking. Miriam Dalli I am encouraged to see that more Maltese executives, business leaders and investors are realising that a genuine commitment to values such as environmental protection, the social progress and corporate governance can translate into monetary value Our corporate mindset needs to be consistently anchored around the creation of better value in everything we produce Miriam Dalli is Minister for the environment, energy and enterprise