A year ago, we saw the setting up of the Malta ESG Alliance, a coalition of major Maltese corporates coming together to promote ESG values. “We have witnessed som very impressive and inspiring transformations which show that the maturity need, does exist in Malta,” says David Xuereb, chairman of the Malta ESG Alliance.
Alliance implies a strong bond, a pact for a coalition of people in agreement. A year down the line, how much of an alliance has this project been? Can you take me through this Alliance’s most salient milestones and achievements?
The Malta ESG Alliance founding partners came together to share experiences, challenges and opportunities to encourage each other to be responsible to their business ecosystems, namely their stakeholders and the community at large. The Alliance is also tangibly accountable to future generations and has lobbied with national leaders, policy makers and social partners, inspired many business teams and participated in many fora that are tangibly committed to a responsible economic transition driven by ESG.
Are businesses truly embracing ESG values as not just as a mere obligation but as a genuine commitment? What has this experience taught you so far?
A year on, the Alliance has achieved more than it had planned or expected. Not only is the Alliance the go-to organisation to inspire and lead business transformation towards complete value by walking-the-talk but is inspired by a serious wave of CEOs committed to transformation for more sustainable business that reduces risks while addressing the expectations and ambitions of the developing markets. This is a positive trend that seem to grow encouragingly.
Do you feel there still is scepticism towards ESG from businesses who might perceive ESG commitments as an unnecessary expense?
This scepticism could be coming from the need to report ESG metrics which alone may seem simply bureaucratic and costly. However, the business community is mature and committed enough and has already started transforming their business model through investment, training and education to benefit from the inevitable economic transition. ESG values actually make business sense, reducing business risk and focusing on responsible changes that add value to all stakeholders. Communicating and sharing best practices will contribute to a clear national economic vision that will accelerate our economy’s transformation.
How many companies are involved in this Alliance today and what would you say are the main benefits that these companies are enjoying by being part of this?
The Alliance Founding Partners are Alberta Group, APS Bank Plc, AX Group Plc, Bank of Valletta Plc, GO Plc, HSBC Bank Malta Plc, International Hotel Investments Plc, Malta Public Transport Services (Operations) Ltd, MAPFRE Middlesea Plc, MEDSERV Operations Ltd, Melita Ltd, PG Group Plc and Toly Group supported by EY and Ganado Advocates. Between them, they are sharing best experience and taking bold decisions to transition their business to benefit from the first mover advantage. In so doing, they encourage each other to de-risk their business which aligns them to a national policy once this will be inevitably introduced and imposed.
Has the collaborative spirit promised by the Malta ESG Alliance come to fruition? If so, what tangible examples can you give in this regard?
Collaboration is key in any economic transition, but the Alliance is made up of business leaders in business, all aligned to the Alliance’s common ambition by collectively measuring and reducing their carbon emissions. It is refreshing to see how this collective commitment has already led to the reduction of the combined energy use equivalent to the consumption of all of the village of Marsaxlokk. There is more to come as these leaders are committing to net-zero dates and similar collaborative actions in social responsibility and governance.
Many people still think of ESG in terms of the environment. How is this Alliance managing to align the respective values of E, S, and G on the same level?
You are correct and it is a pity that many still view ESG only in terms of environment. Perhaps this happens because the consequences of environmental irresponsibility are very tangible, and actions are easier understood. However, social responsibility aspects such as respect for equality, the vulnerable, basic needs and safety are also appreciated and here, measuring metrics are also developing. And whilst governance is not solely limited to the larger organisations, we are seeing growing maturity in this respect amongst small and medium family businesses as well.
How do you plan to tackle the S value of ESG over the coming months?
The Malta ESG Alliance is looking at collaborations with credible social enterprise networks to achieve outcomes that are more focused and impactful to society and that also derive measurable change amongst businesses. It is known that actions that reflect business values attract the right business, valued business partners, discerning investors, committed customers and the indispensable talent.
In what ways can this ESG Alliance truly bring a positive impact to Malta’s economy?
The Malta ESG Alliance member needs to go beyond greenwashing and be credible by walking the talk. The involvement of these leaders has motivated a wider discussion on national economic vision that looks beyond GDP and the Alliance has reached out to national leaders, influential organisations and to MCESD to motivate national policy and legislation to be aligned to ESG values. The Alliance has also suggested that a new Economic Vision for Malta should align with responsible business sentiment and customer/citizen expectations and ensure a clear ambition.
Consumers are increasingly demanding a better way of doing business to the extent that they are even prepared to only invest in companies with strong ESG credentials.
ESG investing is becoming more common especially as more fund managers and investors decide to invest where returns are more sustainable and responsible. This is good business and the faster we move towards ESG, the more resilient, attractive and competitive our jurisdiction will be. This will imply quality customers, quality visitors, quality investments and an improved quality of life. This transformation is inevitable, and to us it is now a matter of transformation speed and efficiency.
Governance has been a theme that has been discussed at political, business and social levels significantly over the past years. To what extent have Maltese businesses been committed to this value? What more can be done?
Good governance concerns us all and should change how we shoulder responsibility and accountability. Good governance is an essential risk mitigator that provides confidence to shareholders, investors, directors, talent, employees and customers alike and our country’s experience over the past few years should have helped us appreciate this at all levels of our society. This is why the business community shares in this responsibility towards efficient accountability that drives sustainable economic growth holistically while respecting all stakeholders.
The Alliance has been engaging even with schoolchildren. To what extent is the current education system contributing to nurturing stronger values in younger generations?
The Malta ESG Alliance has established a ‘Consultative Council of Future Generations’ to keep current CEOs uncomfortably accountable to the aspirations of future generations. The Alliance promotes the need for an education system that addresses the needs and expectations of the jobs of the future. ESG values will guide skill development at all life stages through upskilling, facilitating efficient economic and social transformations to keep the economy and society aligned to sustainable principles and prepared for unforeseen challenges.
You were recently quoted as saying “anyone who joins has to be completely committed through tangible actions that are measurable and accountable.” Can you share some tangible statistics that reflect progress made?
One of the main risks when transitioning to distributive and regenerative economic activities is greenwashing. Malta and its economic actors cannot afford to take such risks and any ambition needs to be tangible and able to be measured. The Alliance is made of true leaders who are ready to walk-the-talk and expect future members to do the same. All members were asked to measure their carbon footprint and tyo commit to reductions in dependence on fossil fuel energy. We have witnessed som very impressive and inspiring transformations which show that this kind of maturity does exist in Malta.
Malta has committed to being net zero by 2050. Is this really doable?
Malta’s commitment to the Paris Agreement is ambitious but correct and is pointing us in the right direction. The country’s transition will require the highest levels of collaboration by aligning Government policies, business actions and citizens together through efficient and effective decisions and actions. Our country’s size should give us the ability to discuss, decide and act fast. Our reputation, attractiveness and competitivity will depend on this. So, yes. This is doable if we all work together.
How can government’s policies and legislation make this transition more effective?
While business can lead by example, only a real and clear medium-to-long term national economic vision driven by Government decisions, policies and legislation will enable and motivate such changes. Such policies and legislation should support education and skills preparedness and attract quality investment, talent and improve reputation to sustain the needed transformation where no-one is left behind.