Discussion Overview – ESG: The challenge facing the Greek economy

Event’s agenda

Opening remarks

The seminar was launched by Mr. Gounaris, Senior Independent Director at the National Bank of Greece (NBG), who analyzed the three main pillars of ESG, that should be adopted by corporate administrations and especially by financial institutions. Mr. Gounaris, specifically, highlighted the climate change issue and stressed that the natural disasters could influence determinatively the financial system, if not proper measures are soon taken. He particularly quoted that “a global threat demands a global reaction”, while pointing out that “sustainability is the key to the post-COVID era”. He continued, mentioning that NBG has made significant progress in the field of ESG by prioritizing the environment and encouraging the funding of the green transition. Mr. Gounaris, referring to the “S” pillar in relation to the activities of NBG, spoke about diversity and inclusion, the protection of health and safety in the workplace and the truly social face of the institution. Finally, he mentioned, of course, the commitment of the National Bank of Greece to adopt principles that ensure a high level of corporate governance and policies/practices that establish standards of reliable professional conduct and business ethics.

Panel 1: “Adaptation of ESG criteria: the regulatory framework & the European and Domestic trends and future outlines”

Amongst the speakers of the first panel, were Mr. Gortsos, Professor of Public Economic Law at the Law School (NKUA), Visiting Lecturer at the European Institute of the University of Zurich and President of the Academic Board of the EBI and Mr. Kontaroudis, First Vice Chairman at the Hellenic Capital Market Commission.

Professor Gortsos elaborated on the legal framework that surrounds the ESG criteria and stressed that compliance with it should become a culture and not just an obligation. Furthermore, he insisted on the necessity for actual change of the mentality of the corporate governance, as well as on the lurking danger of the businesses operating actively outside of the European borders, because of the excessively strict framework the European market has chosen to follow. He concluded by expressing his pessimism for the future outcome of the ESG issues, due to the structural challenges that we will face.

Mr. Kontaroudis expanded on the role of the capital market commission, concerning the adoption of the ESG criteria by businesses, and presented rigorously the legal updates from 2018 to 2023. Thus, he highlighted several regulations, such as 4706/2020, that led to improved corporate governance related practices and also mentioned that the general shift of international investors has pushed the corporate field towards progress.

Panel 2: “ESG criteria and the transition of the European banking system

The second panel consisted of Mr. Leftheris, Director of CIB Bus. Development & Support at the National Bank of Greece, Mr. Mantzoufas, Governor of the Recovery and Resilience Fund (RRF) and Mr. Chabesis, Head of the Sustainability Unit at the Hellenic Bank Association The speakers referred to the way in which ESG criteria are involved in the funding process, as well as to the structure and progress of the Recovery and Resilience Fund.

In his speech, Mr. Leftheris referred to the way in which ESG criteria are taken into account and the practices followed in corporate finance. Initially, he laid emphasis on the emerging danger of the green transition, which corporations confront by diversifying their revenue sources. He continued his speech by describing the process of evaluating a funding application and in particular the main pillars that are taken into account, such as the purpose and the repayment period of the funding. Finally, Mr. Leftheris pointed out that nowadays financial institutions do not reject the aforementioned applications but offer a margin in which the company is required to improve/ comply with certain guidelines in order to finally receive the funding.

Mr. Mantzoufas explained in detail the role of the RRF and the progress that has been made since its establishment. The Fund, as he pointed out, consists of €30.5 billion of European funds, of which €17.8 billion are grants and €12.7 billion are loans. In addition, the minimum goals of the RRF expect the 38% of these capitals to be used exclusively for climate issues and another 20% for digitalisation. Regarding the loan part of the fund, investments will be selected exclusively by commercial banks or European institutions and maximum co-finance will be up to 50% of the amount of the financing. He then moved on to the four main pillars of the Fund, which are green transition and digital transformation, employment, extroversion, and finally research and development. Specifically, for the green transition, he analysed the factors that place an investment under this pillar, such as the contribution of expenditure to climate change mitigation according to the EU Taxonomy, energy savings and green energy production, factors that are monitored by a competent control body. Mr. Mantzoufas concluded his speech by referring to the existence of an appropriate context for investors to engage in sustainable investments and the importance of respecting the principle of no significant harm in all projects.

In his speech, Mr. Chabesis referred to the regulatory framework, the climate and the culture that exists around the ESG pillars in Greece and internationally. The wider conception that is now called “ESG” derives from a report of the IPCC (Intergovernmental Panel on Climate Change). This report presents the course of the climate change with a negative milestone of a 1,5-degree Celsius increase in the average temperature of the Earth and proposes the ESG goals as solutions to prevent this scenario. To achieve these goals, leading to sustainable growth, a green transition of the companies is demanded. Mr. Chabesis described the existing situation in Greece, underlining that the aforementioned culture is already established in the banking system through the Corporate Social Responsibility program. This particular culture is bound to be adopted by businesses with significant environmental imprint. He concluded his speech, by highlighting the fact that the Greek banks and investors are ready to handle the green transition and its required funding.

Panel 3: “The challenge of corporate ESG transformation

The third panel consisted of the following speakers: Mrs. Varfi, CEO at Velos Advisory, Mrs. Georgopoulou, Deputy Chief Listings Officer at ATHEX Group, Mr. Mountouris, Group HSE and Sustainable Development Division Manager at HELLENiQ ENERGY Holdings S.A, Mrs. Athoussaki, Head of ESG, Sustainability & Climate Change at Motor Oil Group and Mr. Tsakiris, Head of Energy Services at ZEB. During this panel, several opinions were discussed, around the challenges that companies face in their ESG transformation.

Mrs. Varfi, the moderator of the conversation, begun by mentioning that ESG is way more than an investment trend. It is a significant issue for the whole society and therefore, companies should comprehend and face the ESG-related commitments with the utmost seriousness. In addition, she highlighted that although the average ESG scores in Greece have improved significantly, they need to improve further to reach the European standards, with compliance, in terms of ESG, being a key factor of competitiveness and growth of the country.

Moving on, Mrs. Georgopoulou explained that the stock market, being placed at the centre of the capital market, takes ESG-related actions based on three main pillars. These include encouraging the flow of capital to the green economy, strengthening the dialogue between members of the investment ecosystem, and enhancing transparency and standardisation in terms of ESG reporting. Furthermore, she discussed about the importance of the stock market guide, and she elaborated on the interest of local institutional investors for the ESG data, that are now required for the reports inside their portfolio. Finally, Mrs. Georgopoulou underlined that in 2023 a platform, which can be used by both listed and unlisted companies, for ESG data is expected to be created in order to enhance the standardisation of the procedure.

Mr. Mountouris pointed out that the energy transition is a complicated attempt, especially for businesses that operate in the energy sector, as energy must be accessible to everyone and should be produced and consumed in a sustainable way. HELLENiQ ENERGY, he noted, is already moving towards this direction, by modifying its strategy and focusing on alternative energy sources. The main objective is the overall improvement of the energy sector, through the creation of renewable energy sources and alternative fuels. As a result, the company is committed to reducing its emissions by 2030 and becoming net-zero by 2050. The aforementioned strategy has received positive feedback from investors, who are keenly interested in emissions data. Concluding his speech, Mr. Mountouris reminded that the timing for the energy transition is right.

Mrs. Athoussaki defined ESG as a culture that is never too late for companies to adopt. She particularly emphasized on the investors’ and regulators’ great demands from energy companies and stressed the important need of state support, regarding the effort to adopt viable and sustainable standards and practices. Moreover, she rendered the energy companies in the centre of the crisis, as they are obliged to deal with the main part of the decarbonisation, making the transition through the ESG criteria and investments on renewable energy sources mandatory. She also described ESG as a set of policies, KPIs and  processes, which can remarkably benefit companies. She, finally, urged students to read and engage in depth with ESG, as it is a subject that encourages cooperation from different fields.

The discussion was concluded by Mr. Tsakiris. More specifically, Mr Tsakiris placed particular emphasis on the use of tools that contribute to the effective energy transition of each company. The role of ZEB is to support this transition, to define the position of each company and to set their short-term and long-term goals by offering the right set of advice. He in fact cited, that the technical faults should be found and solved, as the ESG is now concerning a broad audience and is partially mandatory, so that we all can move forward to improving the current situation. He in fact pointed out that the ESG is developing amongst the new generation and is directly linked with it.

Discussion: “Integration of ESG subjects in Greek universities’ curriculums”

The event was brought to an end with a scientifically and academically interesting discussion, where Mrs. Apostolaki, Assistant Professor of Environmental Science & Executive Director at the Center of Excellence in Sustainability of the American College of Greece and Mr. Doukas, Associate Professor at NTUA participated.

Mrs. Apostolaki analyzed thoroughly the climate change problem and the constant change of the related data. She also brought attention to the constant change of the assessment rates as a result of the data change. In addition, she pointed out the need for a large amount of information and data in order for scientific findings to begin to cover a wide range of practices.

Mrs. Apostolaki, while quoting “Include the future into the present”, sparked a whole new conversation concerning the need to add new subjects in the curricula of Greek universities. This way, young scientists will be better prepared to face the challenges of the present, but especially and primarily the lurking challenges of the future. The environmental science is by itself a crisis-oriented science with a multifaced character that combines skills from different fields and is obligated to coordinate the protection of the environment with the social and economic sustainability.

Prof. Doukas moved on a thorough commentary on the existing development model. He stated that the economic growth, which is an exclusive goal, is not enough for the desirable progress. He also underlined the need for actual use and exploitation of ESG criteria, which can easily become a marketing tool and lose their protective role. Attempting to link pillar “E” and “G”, Mr. Doukas mentioned the importance of true transformation and model change consisting of good governance according to ESG criteria. He highlighted the need for a change of mindset as well as for transparency and accountability within companies with clear criteria for the remuneration and financial bonuses of prominent executives. Finally, Mr. Doukas noted, with clear references to the “S” pillar, that nothing “green” exists without also being “social” and strongly supported the empowerment of the community and individual production.

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