Companies in Montenegro that include ESG factors in their operations will ensure compliance with European and global standards, and at the same time build a competitive business model ready for the future, said the director of the Center for Climate Change at the University of Donja Gorica, Ivana Vojinović.
At the conference "Time for ESG: New Standards for Sustainable Development of Montenegro", she said that the ESG concept brings together environmental, social and governance factors, and that it is a call to view companies not only through their balance sheet, but also through their impact - on people, nature and communities.
"It is time to stop talking about sustainability solely as an ideal, but to start measuring it, reporting on it and applying it in practice," said Vojinović at a conference organized as part of the project "Reporting for the Future: ESG Frameworks for Climate Responsibility of Business Entities", supported by the Eco Fund.
As she recalled, in the European Union (EU) since 2017, certain large companies have had a non-financial reporting obligation, and since 2022, this obligation has been extended to small and medium-sized enterprises, which has further strengthened transparency in business, requiring companies to publish detailed data on the social and environmental impacts of their operations.
"Therefore, ESG reporting and the introduction of non-financial indicators into business operations are becoming an obligation for all business entities that want access to the European market, investors and partnerships," Vojinović pointed out.
Speaking about ESG factors, Vojinović first addressed environmental ones, emphasizing that the role of companies is extremely important in reducing greenhouse gas emissions, and that European companies are legally obliged to redefine their strategies in order to reduce their carbon footprint.
She recalled that the so-called "carbon border adjustment mechanism" has also been established, which is intended to ensure that certain imported products (cement, iron and steel, aluminum, fertilizers, electricity and hydrogen) are subject to the same environmental standards as those produced in the EU.
Vojinović said that ESG also considers social factors, namely how companies treat employees, what their relationship is with local communities, and how committed they are to inclusion and human rights.
As she explained, the third ESG factor - the governance factor, indicates that good corporate governance is crucial for the sustainability of companies and investor confidence.
"Transparency, ethics and responsible decision-making are now under the watchful eye of regulators," said Vojinović.
She recalled that, since 2020, the EU has had a Taxonomy Regulation in force, which defines which economic activities can be considered sustainable, provides investors with clear guidance on what constitutes a qualifying investment to achieve environmental goals, and makes it easier for financial institutions to monitor sustainable practices.
"It is obvious that the EU is continuously setting ambitious goals and regulating ESG practices in a way that it is not a passing trend or regulatory obligation, but a foundation for long-term resilience, innovation and sustainable economic development," Vojinović stated.
This, according to her, means that the Montenegrin economy is also facing the challenge of adaptation - in knowledge, in practice, in systems.
"Companies in Montenegro that incorporate ESG factors into their operations today will ensure not only compliance with European and global standards, but will also build a competitive business model ready for the future," Vojinović emphasized.
She said that through the project "Reporting for the Future: ESG Frameworks for Climate Responsibility of Business Entities", Montenegrin companies have the opportunity to become familiar with the requirements coming from the EU when it comes to sustainable business and non-financial reporting in a comprehensive and practical way, thanks to which they can better prepare for a new era of business in which transparency, social responsibility and environmental care are key indicators of success.
Vojinović said that the project created the Handbook "Business with an Eye on the Future: ESG Reporting for Business and Banks", authored by Biljana Braithwaite, which contains guidelines on how to integrate sustainability into corporate governance, in accordance with European directives and regulations.
As she added, along with the Manual, a national survey of the attitudes and level of awareness of the Montenegrin economy on non-financial reporting was conducted, under the leadership of Gordana Radojević, which shows how the Montenegrin economy sees these changes.
"The results of the project should be a strong incentive for business people to recognize ESG principles not as an additional cost, but as an investment in long-term competitiveness and reputation," said Vojinović.
The Director of the Environmental Protection Fund, Draško Boljević, said that this cooperation between the Eco Fund and the Center for Climate Change is actually just a continuation of a series of more successful activities and that the Handbook, as a product of that joint project, is actually just the beginning of the whole story.
"What I know for sure is that we at the state level will promote this story to other institutions," said Boljević.
He emphasized that it is crucial for them that the users of this manual and project will be business entities.
"We want to create a stronger connection between the state system and the business sector," Boljević emphasized.
As he stated, regulatory agencies will have an indirect effect from the Manual and the project.
"So that the entire system will be connected, all with one goal and what the Eco Fund exists for - to make our environment healthier and cleaner," said Boljević.
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