GREENPACT Recap: How much does the green transition cost?
The costs and challenges associated with the green transition were a major focus of the first edition of the GREENPACT European ESG Summit. Thematic discussions brought together representatives from the financial and advisory sectors and institutions supporting businesses in the process of sustainable development. During the debate ‘How much does the green transition cost?’, experts pointed out that although it entails significant costs, it also creates real investment and development prospects.
Magdalena Osowiecka, Senior Manager at Deloitte, emphasised that many companies have already incurred the costs of green transition, but this is only the first step in long-term investments. She indicated, among other things, EU regulations such as Taxonomy, which generate specific costs – from hiring specialists to training employees or cooperating with consulting companies: - The preparation of the report provokes reflection within the organisation about what we do not have and where to invest first. And this is where further investments begin - if we invest in decarbonising our carbon footprint, meeting decarbonisation targets, or if we put money into technological innovation and changing production.
Rafał Tenerowicz, Manager at Stratego, highlighted the fact that the main sources of funding for the transition are EU subsidies, which, although available, are still in their early stages in Poland. He identified three key areas receiving financial support: innovation, the circular economy, and energy: - Our institutions are aware that they could do a better job of informing the public about their competitions and grants, but we are off to a good start and we are working on it.
Beata Frankiewicz-Boniecka, Head of the Strategic Clients Department at Bank Pekao, pointed out that banks play not only a financial role, but also an educational one: Frequently, entrepreneurs ask us where to find information. (...) As a bank, we have prepared a special website for smaller entrepreneurs, which includes a search engine for subsidies. We are trying to help entrepreneurs in every way possible, not only through bank funding, but also by providing access to information. The expert also noted the enormous scale of investments needed by 2030 – as much as PLN 800 billion is needed for these objectives in Poland.
Robert Adamczyk, Board Member of the Responsible Business Forum, reminded participants that ESG reporting is not an aim in itself, but rather a tool for creating strategies and achieving goals, including those with a geopolitical dimension. He stressed the necessity of including the ‘human factor’ in the analysis, i.e. the awareness of employees and management, a factor that is becoming essential: Every employee and employer will soon be responsible for sustainable development, nearly as much as employers are currently responsible for health and safety.
Piotr Jabłoński, Executive Director at Bank Gospodarstwa Krajowego, emphasised that Europe is a leader in green transition, also in terms of funding, but Poland still has a lot of catching up to do, especially in the area of energy storage: As far as Poland and our needs are concerned, the KPO will be a major stimulus for growth. As BGK, we are requesting half of the entire KPO in the lending part to finance large area investments, such as offshore wind farms, transmission and distribution networks. These are also classic renewable energy investments. (...) This is approximately 120-130 billion for companies from the KPO.
The experts participating in the discussion panel insisted that the key challenges associated with the green transition include understanding regulations, building competencies and strategies, and effectively utilising available sources of financing. Cooperation between the private, public and financial sectors is a condition for the successful implementation of this transformation.