Global disruptions have been a constant thorn in the side – from the financial and economic crisis to a global pandemic, logistics and supply chain constraints, geopolitical unrest and persistent inflation.
What is also constant is the triple planetary crisis of climate emergency, ecosystem degradation and a growing waste and pollution problem, being a direct result of unsustainable production and consumption patterns adopted globally.
Such matters have been leading to environmental degradation, as well as decreased quality of life, especially for those individuals in the lower rungs of society who hold little to no financial safety net, as such disruptions impact their lives and livelihoods.
Policy makers are increasingly being faced by the need to develop new policies and plans to support a global sustainable transformation while ensuring that no one is left behind. National targets are being set, from carbon emission reductions to waste and recycling levels, and energy efficiency targets, among others. Environmental, social and governance (ESG) matters are growing in their importance, with increased interest, regulation and disclosure demands.
Regulation is, however, not the only driver changing the modus operandi of private entities. Companies are shifting away from Friedman’s notion that “the business of business is business” and are increasingly looking at the triple bottom line approach, rather than solely financial profit.
Private corporations are becoming more aware of the double materiality of ESG matters. On one hand, firms of all sizes are increasingly considering the impacts that they could have, not just on their operations, but also on the environmental, social and governmental aspects of the communities they operate in. Corporates hold the moral obligation of not only ‘not harming’ their communities but bring positive change by being a force for good.
On the other hand, businesses are also aware that ESG matters could also involve risks and opportunities for the business itself. Firms are nowadays working to quantify the risks in place and apply mitigation measures to ensure the longevity of their businesses.
Moreover, as consumers and investors alike demand more accountability, responsibility and transparency in relation to ESG factors, businesses are realising that including ESG factors in their own operations generates value for the business too.
A number of initiatives have been undertaken as many businesses have sought and adopted their own approaches and strategies- David Xuereb and Chris Meilak
Locally, a number of initiatives have been undertaken as many businesses have sought and adopted their own approaches and strategies. Given the magnitude of the endeavour, and the relatively small size of our local enterprise, a coordinated and collaborative effort is needed to motivate and support further actions. It is for this reason that the Malta ESG Alliance (MESGA) has been set up.
This new alliance, launched on July 20, aims to act as a platform for Maltese businesses to work together to achieve national and global ESG goals. The founding members consist of 13 reputable companies deriving from various economic sectors.
The founding members 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 Products Ltd.
Assisted by ex-Chamber president David Xuereb and EY Malta, these first alliance members aim to be catalysts for change, whereby private operators lead by example and jointly develop frameworks that support responsible and ethical business actions while motivating initiatives that will drive a more competitive Malta.
Following several discussions, the founding members agreed on decarbonisation as the first thematic of many to be tackled. Each member has committed itself to a tangible and measurable decarbonisation project.
During the launch, the CEOs and representatives presented these tangible commitments ranging from more responsible green lending, earmarked decarbonisation lending portfolios, renewable energy generation, electrification of fleets and fleet management systems, using energy-efficiency technologies and a framework for net-zero buildings in Malta, among others.
In aggregate, these committed projects are estimated to lead to, as a minimum, c. 18,000 tonnes of CO2 equivalent saved emissions per year. This is equivalent to the total annual emissions of the inhabitants of Marsaxlokk, or between 0.7 and one per cent of Malta’s 2019 total emissions. Quantified progress of such projects will be monitored periodically through agreed KPIs.
These initiatives are to act as beacons, to assist and encourage other companies to the same journey and take similar actions. Following decarbonisation, other ESG thematics will be prioritised.
MESGA is indeed thrilled to have launched this initiative; it is even more excited to ‘walk the talk’ by transforming commitments and ambitions into tangible action which will ultimately make a difference to Malta’s and society’s well-being. It asks all well-meaning business to join this journey.
David Xuereb, a former president of the Malta Chamber of Commerce, is an architect active in the sector of sustainable design and the green economy.
Chris Meilak, a partner at EY, is an economist and accountant leading EY Malta’s Economic Advisory and Sustainability offering.