The Croatian Chamber of Commerce has established the Croatian ESG rating as a model for evaluating sustainable actions implemented by companies.
The ESG rating will be assigned to firms based on their approach to environmental, social, and governance practices.
In addition to the ESG rating, the Croatian Chamber of Commerce (HGK) established an award for companies with the best results, to be announced for the first time at the conference Let’s Back Sustainable (Podržimo održivo), scheduled for September 19.
HGK stressed that sustainability is not just a trend, or something abstract without measurable benchmarks, adding that the requirements are very concrete. If they are not met, financing could be cut completely, it pointed out.
With the key benefit of attracting capital and investors, companies will use ESG rating to assess their performance and gain insight into risk exposure.
Each company will receive its individual report and suggestions for improving the results
They can monitor their progress and adjust their business strategy, compare themselves with other firms in their sector, and increase competitiveness, HGK said and added that the additional benefit is a better reputation regarding shareholders, employees, and business partners.
ESG rating criteria are aligned with regulations, requirements of financial institutions and markets, and the attributes of each industry. Part of the information for rating will be collected through an ESG questionnaire, and the rest based on public data, from financial reports to estimates of greenhouse gas emissions for a specific industry.
The collected indicators will be interpreted with regard to the industry so that companies are not punished with a lower rating due to the nature of their activity, HGK said.
Each company will receive its individual report and suggestions for improving the results. Registration lasts until August 31.
ESG Academy has educated more than 800 participants on developing a sustainability strategy
Tomislav Radoš, HGK’s vice president for industry and sustainable development, said the new regulations require credit institutions to take ESG risks into account when approving loans.
“It must be part of the new credit policies. The fact that sustainability is key to competitiveness and business success has never been more vivid. For companies that do not operate sustainably, money is a timid beast,” he said, adding that through ESG Academy, HGK educated more than 800 participants on developing a sustainability strategy, and that now it’s time to measure sustainable practices.