GREENPACT Recap: Presentation of the report by the Warsaw School of Economics (SGH) ‘ESG Management Maturity and the Climate Crisis’

The research for the report was conducted at the College of Business Sciences at the Warsaw School of Economics, with the participation of over 300 entities involved in economic life in Poland, i.e. investment funds, local government units and listed companies. The authors of the report addressed it primarily to stakeholders in sustainable transition in the context of ESG.

Building climate crisis resilience

Professor Barbara Ocicka (SGH), head of the project, pointed out that building resilience to the climate crisis should be the goal of every business: If we want to think strategically and proactively, we need the ability to prevent climate change and reverse these changes.

The expert also pointed out that climate resilience affects business stability, financial results and the value of a company. The current maturity of entities in Poland and the impact of ESG on this process were also assessed.

ESG in local government units

As the speakers pointed out, local government units were among the key participants in the study. Izabela Rudzka, PhD, Assistant Professor at the Department of Corporate Bankruptcy Research at the Warsaw School of Economics, noted that the main premise of local government units is power and mission, with the environment and prevention coming last.

In the researcher's opinion, local government units should act in such a way as to prevent sudden environmental phenomena: - There is no doubt that ESG should be included in the development strategy of local government units. Local governments should adopt solutions currently dedicated to companies. Moreover, Dr Izabela Rudzka continued, one of the weaknesses of local government units is the lack of a comprehensive definition of the types of climate risk for individual local government units, which is related to the lack of specific risk indicators and measures. According to the researcher, this is an incomplete approach to creating a circular economy.

However, it is worth noting that researchers have identified the strengths of the sampled local government units, i.e. a positive attitude towards change and a willingness to improve qualifications in the field of sustainable development. For this reason, experts recommend continuous monitoring and implementation of specific strategies, as well as: close cooperation, creation of risk mapping, education in the area of green economy in its local holistic approach, and moving away from information silos.

Integrating ESG factors into the organisation

Jolanta Turek PhD, Assistant Professor at the Risk Management Department of the Institute of Corporate Finance and Investment at the Warsaw School of Economics College of Business Administration and external expert at the Responsible Business Forum, analysed the maturity model of listed companies in terms of incorporating ESG factors into their organisations: - There is a large discrepancy in the maturity of companies - companies from the WIG20 index are characterised by high maturity. Companies incorporate ESG factors, and as many as 80% of companies have existing business processes that take ESG into account.

The main recommendation of the researchers is that ESG must be incorporated into company processes at the strategic level, through members of the management board. ESG risk factors should be treated as ‘full-fledged’ factors among others. As the experts unanimously noted, ESG generates additional work, which is why they recommend reviewing the employment structure and competence development. In the opinion of the researchers, it is also important to build an inclusive organisational culture with strong leadership, and ESG itself should be implemented well in advance, as this increases the company's competitiveness and growth opportunities.

Kamil Gemra PhD, Assistant Professor at the Department of Digital Finance FINTECH SGH, addressed the diagnosis of the situation of investment funds and noted that two-thirds of funds do not identify ESG as a potential benefit: It is concerning that funds treat ESG somewhat as a burden on their own organisation, an additional workload. In our opinion, it is essential to integrate ESG factors into investment funds, e.g. through separate positions in investment fund companies.