IRF: Prepare companies for business according to European standards

Environmental, social and management (ESG) standards represent an imperative for business in accordance with European ones, said the executive director of the Investment and Development Fund (IRF), Irena Radović, and added that this institution will encourage their clients to change their business model and traditional business culture.

At the conference entitled Ecological, social and management standards and gender equality: Drivers of economic development, she announced that ESG standards and RR are not only a prerequisite for sustainable development, but an imperative for business in accordance with European standards.

"New European regulations set requirements for companies based in developed Europe to carry out effective checks regarding potential or actual adverse impacts on human rights, the environment and good governance in their operations and business relations with partners," said Radović at the conference organized by the IRF. , the program of the AIRE Center for the Western Balkans and the consulting company Sustineri Partners, with the support of the Government of Great Britain.

She believes that these requirements will affect their partners outside the Union, which means that companies in the Western Balkans that provide goods and services to consumers and commercial customers in the EU must already start adapting to these changes.

"If this is not the case, they will be in a situation where they will not be able to cooperate with companies from the EU, nor to export products to EU countries. That is why I think it is important to set standards by example," said Radović.

She said that it is imperative that IRF, as a key development financial institution in the country and a leader in green financing, acts more widely and encourages clients and companies, of which there are 2,5 thousand in the portfolio, to change the business model and traditional business culture, and preparation for business according to European standards.

Radović stated that IRF was changing itself and that for that institution last year was a year of changes, green and digital transition, as well as strong support for female entrepreneurship. Thanks to such a relationship, IRF achieved the best business result in the last ten years, strengthened existing and formed new international partnerships.

"ESG standards recognize the importance of adopting high standards for the protection of human rights, and especially respecting the principle of gender equality as a key factor for economic progress. In this segment, the IRF also made a strong step forward last year, and it refers to the fact that 50 percent of women at the level of all management positions in that institution," said Radović.

According to her, the weaknesses of the Montenegrin system are recorded in the fact that in Montenegro four percent of women own real estate, 9,6 percent of women are company owners and their presence in managerial positions in companies is only 5,88 percent.

"That is a strong enough motive for us to be dedicated to this topic, because all the experiences of developed economies show that companies with a greater representation of women in management and boards of directors achieve higher profits. Focusing on the empowerment of women contributes to the growth and resilience of the economy and society in general," said Radović. .

She added that initiatives that strengthen gender equality contribute multiple times to solving climate challenges, mitigating the effects of the pandemic and strengthening the profitability of business and the economy as a whole.

Director of the AIRE Center's Western Balkans Program, Biljana Braithwaite, said that the benefits companies can gain in terms of profitability and long-term sustainability offer an opportunity to be more successful and to contribute positively to society.

"That's why ESG standards exist, to turn recommendations into obligations and to turn vague goals into clear indicators of success. How do we manage companies, how do we protect the human rights of workers, how do we treat the environment? These are important questions for those who want to do business successfully in any sector," believes Braithwaite.

She said that many regulations that are being prepared in the EU require companies to carry out effective screening regarding potential or actual adverse impacts on human rights, the environment and good governance, which also applies to their partners outside the EU.

"This means that companies in Montenegro will have to pay attention to these regulations," said Braithwaite.

ESG, i.e. environmental, social and governance aspects, although apparently divided into three categories, are all interconnected and interdependent.

"Gender equality is a very important aspect of the ESG agenda, which permeates almost all others, and we could say that it is their multiplier, as well as the multiplier of successful business," stated Braithwaite.

That is why, according to her, the improvement of gender equality in Montenegro and the region is so important, and there is certainly room for progress.

"Women on the labor market in the region are more difficult to hire, easier to fire and, although they are more numerous and more educated, in some sectors they have a lower salary than men. They are certainly more often exposed to discrimination, and especially in connection with pregnancy and maternity," Braithwaite said. .

She assessed that changes should be made in culture, customs and traditions, because without changing traditional obligations, there will be no essential changes.

The Ambassador of Great Britain to Montenegro, Karen Maddox, announced that it is important for companies in the Western Balkans to understand how to meet all these standards, not only because responsible business is the right direction, but it also makes good business sense.

"Gender equality is a key element of sustainable and responsible business practices. I want to encourage public policy makers in Montenegro to set standards for responsible business and to encourage businesses to consider how they can adapt to meet them," Maddox said.

As she stated, Montenegro has a long way to go before accessing the potential economic dividends from the participation of women in the workforce. Governments, companies and individuals have a role to play in accelerating progress in the field of gender equality.

"National governments can establish the right legislative framework. For example, protecting women from discrimination due to maternity, or providing equal wages and benefits and enforcing laws that protect women from violence," Maddox believes.

According to her, companies can set their own policies to ensure that they attract, retain and promote female talent. Leaders, she added, should advocate for gender diversity, fostering an inclusive culture of respect where women feel they are equal.

"And as individuals - each of us can make a contribution. Women can advocate for themselves throughout their careers and help others progress through sponsorship and mentoring. This is something I have been doing for years within my organization, the Ministry of Foreign Affairs. And each of us , if we have families, he can raise sons and daughters who are not limited by gender," said Maddox.