Author: Tijana Gajić, ESG Lead at CWP Global
Strong attention to Environmental, Social and Governance (ESG) concerns safeguards the investments and ensures long-term value protection for both the business and society. Renewable energy companies can provide additional value to society and can also benefit from adopting sustainable practices by better managing risk and opportunities arising from a wider group of stakeholders. CWP Global provides leadership in the energy transition, as well as in the sustainable and value-adding business practices for achieving this goal.
At CWP Global, we believe that companies should be responsible, active, and value-adding members of their communities. We strive not just to reduce our environmental and social footprint, but to improve the wellbeing of the planet and everyone we work with.
This idea of a triple bottom line – a notion that a business should care about people and the planet as much as it does about profit is not a new one. Such a view has recently evolved into the concept of ESG, which is the basis of sustainable investing today. This type of investing is rising exponentially. Awareness over global issues is on the rise and an increasing number of individuals and businesses assume the responsibility to be part of the solution, minimize their footprint and contribute to the wellbeing of nature and their communities. In addition, sustainable business practices increasingly prove that the value to society is not created at the expense of profits, but rather the opposite.
ESG stands for Environmental, Social and Governance and refers to three principal sets of factors in measuring business sustainability
The ‘’E’’ in ESG refers to environmental factors and considers how a company performs as a steward of nature. It examines the company’s energy use, natural resource conservation, the waste it discharges, its carbon emissions.
The ‘’S’’ refers to social factors and looks at how a company manages its relationships with its broader group of stakeholders – its employees, customers, suppliers, political environment, and the communities where it operates. It investigates topics such as employee wellbeing or giving back to local communities.
The ‘’G’’ refers to governance and examines how a company is managed. It looks at rules, roles, and processes through which the company, and its board, are governed and is concerned with aspects such as board composition, decision-making process, internal controls, audits, corporate disclosures, executive pay, and shareholder rights.
Embedding ESG in strategy helps minimize the footprint, preserve the environment, and create additional value for all stakeholders
According to Darren Walker, President of the Ford Foundation, it is more critical than ever that businesses in the 21st century are focused on generating long-term value for all stakeholders and addressing the challenges we face, which will result in shared prosperity and sustainability for both business and society.
Businesses today have a general responsibility to reduce their environmental and social footprint. They also have the opportunity to add value and improve wellbeing of people and communities they work with.
Current business practices focused predominantly on profits made room for a number of pressing issues, including climate change and deforestation. These challenges cannot be resolved by Governments and NGOs alone but require committed action from individuals and the business sector as well. Businesses today have a general responsibility to reduce their environmental and social footprint. They also have the opportunity to add value and improve wellbeing of people and communities they work with. At CWP Global, we trust this is the right thing to do, even if it comes at a cost. We have always contributed to our vision of the world in which care for nature and for each other lies at the heart of every decision we make as individuals and as businesses; the world in which we grow together through mutual support and benefit-sharing.
At CWP Global, we have always contributed to our vision of the world in which care for nature and for each other lies at the heart of every decision we make as individuals and as businesses; the world in which we grow together through mutual support and benefit-sharing.
Encouraging news is that a rising number of business leaders is, too, embracing care and responsibility and adopting the sustainable and value-adding approach in their operations. The Business Roundtable of influential American CEOs in 2019 claimed the purpose of a company should be to “serve not only their shareholders but also deliver value to their customers, invest in employees, deal fairly with suppliers and support the communities in which they operate.”
Strong attention to ESG concerns does not compromise profits, quite the opposite
The great news for business is that engaging in sustainability practice is not only the right thing to do but a profitable one as well. There is a strong business case for adopting the ESG framework and a rising body of research that proves that Companies can do well by doing good.
Failure to address ESG concerns and actively manage stakeholder engagement leaves the business open to different kinds of risks, such as losing a social license from the community they operate in, facing regulatory fines, or losing reputation due to environmental damage
Every business is deeply intertwined with environmental, social, and governance concerns. Failure to address these concerns and actively manage stakeholder engagement leaves the business open to different kinds of risks, such as losing a social license from the community they operate in, facing regulatory fines, or losing reputation due to environmental damage.
On the other hand, the adequate management of ESG concerns can be a source of business opportunities. Investing time in employee wellbeing and development leads towards a motivated and satisfied workforce, which is linked to higher shareholder returns; a leadership with purpose and care attracts millennial talents; care for the environment is welcomed by customers who are willing to pay premiums to “go green”; good governance procedure helps safeguard and de-risk the investment and in turn attract capital at lower costs; strong community and government relations enable better access to community and state-controlled resources, and sustainable business practices enable access to rapidly growing sustainable funds.
The vast majority of studies support the notion that a strong ESG proposition is linked to value creation. One of the studies, performed by IFC, proves there is a direct link between the financial performance of the companies and the good they do to the environment, their labor force, and communities.
Reporting also matters. As evidenced by IFC and Harvard Business School studies, being considerate of and transparent about ESG risks is linked to an increase of firm value.
ESG criteria are increasingly used by investors to evaluate the business in which they might want to invest
Sustainable investing has grown exponentially in recent years. In 2020, global sustainable investment in five major markets reached $35.3 trillion, a 55% increase in the past four-year period (2016-2020).
BlackRock Inc., the largest money manager in the world, is making sustainability the new standard for investing. In his 2020 letter to their clients, their CEO stated that the Company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders.
Even renewable energy companies have the responsibility to engage in and can benefit from sustainable business practices
Renewable energy companies are driving the energy transition, but we should take care that this transition is made in a sustainable manner. The planet is an important stakeholder, but we have a duty to ensure that the value is preserved for other interested parties as well. In addition, other stakeholders are an important source of risks and opportunities for renewable energy companies. Think of the social license from communities, motivated workforce, and regulatory support. Attention to all stakeholders safeguards the investment and helps preserve its value over the long term. Hence even renewable energy companies strongly benefit from adopting ESG principles of operations.
Being one of the leading renewable energy developers in the world, we assume the responsibility to take the lead on sustainable and value-adding business practices, too
The current portfolio of CWP Global includes over 120GW of renewable energy projects in development which span over four different continents. In Southeast Europe, we are developing projects in four different countries, with over 1GW of solar and wind farms in development. “With great power comes great responsibility” – the size of the projects we are developing and their potential for impact calls for even greater responsibility to act with care and purpose greater than profit maximization.
In 2020 CWP Global began to formalize its sustainability approach using the recently developed best practices defined through ESG framework
Since inception, care for nature and everyone we work with has been the lens through which all of our decisions were made.
In 2020, we decided to formalize our sustainability initiatives using the recently developed best practices and standards, and formulate an overarching ESG strategy to guide the direction of CWP Global.
The Fântânele-Cogealac Wind Farm developed by CWP Global is the largest onshore wind farm in Romania and in Europe with an installed capacity of 600 MW
We developed an overarching sustainability framework, structured around the key environmental, social and governance issues on which we are committed to act.
The current portfolio of CWP Global includes over 120GW of renewable energy projects in development which span over four different continents.
In early 2021, we established the ESG committee chaired by our ESG Lead who is directly accountable to the Board for the delivery of our sustainability objectives. This Committee is currently operating as a working group tasked with ensuring that the sustainability framework, supporting management system and our ESG metrics are fit for purpose and that these are delivered on time. Over the long term, the ESG Committee’s role will be to provide leadership and implementation oversight on ESG strategy and initiatives, to maintain a watching brief on emerging ESG issues and to be a source of ESG information and guidance to our wider team. Additionally, the ESG Committee members will participate in the materiality assessment process and provide direction for our ESG reporting activities.
One of our main ESG objectives is leading the energy transition through innovation and development of large-scale renewable energy projects and investing in the wellbeing of people and communities we work with
Harnessing the immense power of nature’s assets, in particular the sun and wind, to deliver green energy and to accelerate a new and vibrant market for green hydrogen and derivative fuels at a disruptive scale is essential in order to rapidly decarbonize the global economy and narrow the pathway to solving the climate crisis. Our care for the environment and our vision for deploying net-zero energy to accelerate global decarbonization are further reinforced by a public commitment to rapidly phase down our own carbon footprint. This year, we joined the UN Race to Zero campaign and committed to achieving net-zero greenhouse gas emissions by 2040, ten years ahead of the timeline foreseen in the Paris Agreement.
Back in 2018, we developed a unique community co-investment scheme in Australia that enabled sharing of the financial benefits from our “Sapphire” wind farm with community members.
Community wellbeing and development continue to be equally important areas in which we innovate and seek opportunities to add value. To name one of the initiatives: back in 2018, we developed a unique community co-investment scheme in Australia that enabled sharing of the financial benefits from our “Sapphire” wind farm with community members. We further supported this community through dedicated funds targeted at education, community development programs, health and wellbeing, and environmental initiatives. We have similar initiatives in all of our developments.
PEXIM Garden Party in Belgrade on the occasion of the 10th generation of PEXIM Foundation Scholars about to begin their Master’s studies at the University of Cambridge (in the picture: Mihail Petreski, President of PEXIM Foundation, Marko Purić, PEXIM Scholar, Maja Turković, CWP Global and Tijana Gajić, CWP Global and PEXIM Foundation)
Our employees have always been of special concern to us. Through dialogue and individual approach, we are constantly seeking ways to support their wellbeing as well as their personal and professional development. To illustrate one example, in 2018 we have encouraged and supported a transition of our colleague from a personal assistant position to a project development assistant position by financing their MBA education and providing mentorship to support this move.
CWP Global believes that investing in a sustainable future inherently includes investing in education of our youth who will lead the way towards more sustainable business practices of tomorrow
Through partnerships with trusted NGOs, we direct our time and financial resources to support youth education and mentorship programs. Since 2013 we partner with PEXIM Foundation and invest in the education of young talents in Serbia and in return expect them to contribute to the sustainable progress of their communities in the social, legal, and economic domain.
In addition to their everyday jobs, alumni of the Foundation organize mentorship programs through which they further promote values of leadership and sustainable practices with their younger colleagues. Witnessing the profound change that happens when we support young people motivated to make a positive impact, we have replicated this model in Bulgaria and other regions as well.