In recent years companies’ awareness and activity in the field of sustainable growth has been increasing. This trend has not even been hampered by the COVID-19 pandemic. Paradoxically – the extremely negative experiences have strengthened the interest of entities in this topic.
The COVID-19 pandemic changed many aspects of life. It might seem that the last year was not conducive to thinking about the pursuit of long-term strategies or designing the future. It could also seem that companies focused on immediate problems, maintaining liquidity, fighting for every job or even for survival on the market, would lose interest in achieving sustainable development goals (SDGs). Nothing could be further from the truth.
Aneta Piątkowska
Deputy Director of the Economic Analysis Department in the Ministry of Economic Development, Labour and Technology
Market participants are increasingly focused on sustainable consumption. As shown by an advisory firm in one of its reports Consumer Products and Retail: How sustainability is fundamentally changing consumer preferences, as many as 79% of customers may change their purchase preferences while taking into consideration the environmental impact of their decisions, and more than one half of all customers admit that environmental issues influence their consumer behaviour. Many of these characteristics are displayed by representatives of the younger generation, which indicates that this trend will continue to grow, especially since consumers have a lot of choice. These behaviours are more and more often recognized by companies. Conscious consumers are setting the new purchasing trends in which one of the decisive factors is taking environmental issues into account. This includes, among other things, aspects such as carbon footprint, waste management, packaging design, and energy consumption. Social aspects are equally important: safety and responsibility in the production and supply process. In response to this trend, companies, wanting to increase the transparency of their operations, are increasingly sharing information on their approach to sustainable development and publish information on how their products are manufactured.
The ecological awareness related to the topic of supply and production is also growing. However, although in the context of achieving the SDGs, companies generally do well in terms of human rights and social issues, for many of them environmental matters remain a challenge and are not a priority. At the same time, research shows that consumers would be willing to change their purchasing decisions if they had known earlier about the problems related to the sustainable production of a given product range. This is a huge area for improvement and to create certification standards not only for sustainable supply chains but also for sustainable production.
Entities that care about ensuring the transparency of their business partners should develop broader and more open communication strategies to enable customers to make informed purchasing decisions, which can have a significant impact on developing sustainable consumer behaviour.
To date many company activities in the area of sustainable development have met consumer expectations. In the long run, the changes will be additionally enforced by directives and regulations that will gradually come into force at EU level. In this context, attention should be paid to the issue of financing businesses – including sustainable financing. The first significant EU regulation is the one concerning the disclosure of non-financial information (the so-called Sustainable Finance Disclosure Regulation), which came into force on 10 March 2021. It is one of a package of three regulatory measures brought in by the European Commission in March 2018 and included in the Action Plan for financing sustainable growth. The regulation covers financial market participants and financial advisors who offer financial products and services. Of course, this will also have an indirect impact on other market participants. Financial institutions are already obliged to inform about how they treat environmental, social and corporate governance issues in their investment decisions (so-called ESG factors). In Poland this remains a challenge and an area for action for many companies, especially as the new regulation will force a change of approach where profits are the most important factor.
In addition, the European Commission is finishing work on the delegated act to the so-called Taxonomy Regulation – tools facilitating the identification and classification of investments supporting sustainable development. The entry into force of these regulations will also have a substantial impact on many production sectors and on improving manufacturing standards and minimizing environmental damage. Financing green investments should be promoted and supported both by financial institutions and by informed investment choices. That is why one trillion euros has been earmarked for companies which are planning ecological and digital transformation in the investment plan for the European Green Deal. A similar approach has been taken with respect to the Recovery and Resilience Facility – funding in the form of grants and loans for companies should support the so-called green transformation. The climate policy should set the legal framework for the operation of businesses.
The upcoming years will show how seriously we have approached the crisis caused by the pandemic. It also remains to be seen to what extent the declarations made in the face of the health crisis will translate into the implementation of sustainable development and SDGs in the planned actions of governments and various groups of stakeholders. However, it is to be hoped that informed consumer choices and social pressure, using a bottom-up approach, will make functioning in a sustainable environment no longer a matter of choice for companies. It will also become the result of an economic calculation – something more than the well-known CSR and the greenwashing that often follows it. Thinking about a company’s economic results will be inextricably linked with choosing sustainable investment solutions that help achieve not only high socio-cultural and ecological standards but also economic ones. To the benefit of society.
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