Investments for business in wartime:How to survive and be sustainable
Investments for business in wartime:How to survive and be sustainable
Experienced expert on sustainability, Chairwomen of the AVgroup Alina Sokolenko shared how to build a business today on the basis of the global approach to sustainability - ESG (environmental, social and governance), i.e. environmental, social and corporate governance
The importance of the topic
Now, in and after the war, business must first focus on an effective way to rebuild the economy. Ecosystem formation is one of the most effective ways to do this. After all, it is an effective and mature partnership that provides a value proposition to the end consumer. The ecosystem contributes to the maximum development of all its members. The positive effect is the result of the use of collective opportunities and joint resources without additional costs with the complementarity of each other. For example, two stores want to grow, but moving separately, they will spend much more effort than if they worked together. If these two stores use a common warehouse, the costs will be reduced accordingly…
Of course, the most valuable thing we are losing now is people.
The worst thing we will lose tomorrow, after the war, is the economy. The food crisis and famine are things that need to be avoided by making the right decisions.
At all levels, the re-evaluation of investment priorities should be carried out considering the ESG criteria of sustainability (environmental, social and governance), i.e. environmental, social and corporate governance criteria.
Changes are already underway. For example, since the beginning of Russia's war against Ukraine, hundreds of companies from each industry have severed or significantly reduced their business relations with the aggressor country.
Whether it's sanctions or just a matter of choice, businesses come from all sectors of the Russian economy, from its vast energy sector to cars, finance, retail, entertainment, culture and fast food. International investors stop investing and withdraw from current projects, despite the implementation phase.
However, there are those who remain to work in the aggressor country, facing global pressure and a ban, and, as a result, fluctuations in impeccable reputation and their ESG ratings.
The worst thing we will lose tomorrow, after the war, is the economy. The food crisis and famine are things that need to be avoided by making the right decisions.
At all levels, the re-evaluation of investment priorities should be carried out considering the ESG criteria of sustainability (environmental, social and governance), i.e. environmental, social and corporate governance criteria.
Changes are already underway. For example, since the beginning of Russia's war against Ukraine, hundreds of companies from each industry have severed or significantly reduced their business relations with the aggressor country.
Whether it's sanctions or just a matter of choice, businesses come from all sectors of the Russian economy, from its vast energy sector to cars, finance, retail, entertainment, culture and fast food. International investors stop investing and withdraw from current projects, despite the implementation phase.
However, there are those who remain to work in the aggressor country, facing global pressure and a ban, and, as a result, fluctuations in impeccable reputation and their ESG ratings.
It is already important for Ukrainian business to create projects that will attract investment.
Today, Ukraine has become the epicenter of global financial support, aimed at countering the Russian Federation and rebuilding the country after the devastating activities of the occupier. However, these investments must meet the principles of sustainability and ESG criteria.
Each development bank in its portfolio increases the focus on the green economy every year and strengthens the criteria of sustainability.
Thus, the immediate financial support of Ukraine in the amount of 668 million euros was approved by the European Investment Bank, providing these funds to meet the needs of critical infrastructure and rehabilitation of social infrastructure destroyed by the Russian army. At the same time, at the beginning of 2022, this bank tightened the requirements for social and environmental standards for all its projects.
The EBRD has released a € 2 billion aid package in response to the war in Ukraine. Its activities are built according to sustainability standards. Today it is a world leader in climate finance.
Energy independence from Russia is an important area of investment not only in Ukraine but also in Europe and the United States. Currently, the Biden administration insists that the best way to reduce dependence on Russian energy is to accelerate the transition to renewable energy sources, while looking for short-term options for bringing new oil and gas to market. In particular, investments of $ 500 billion in climate spending and tax incentives to increase renewable energy production, deploy electric vehicles and improve energy efficiency are being considered.
The current escalation has led to such a radical rethinking within Europe. On the one hand - the maximum focus on the development of renewable energy sources, and on the other - short-term solutions to find alternatives to Russian gas. For example, Germany is considering extending the life of coal and nuclear power plants and creating a national coal reserve. The position is similar in other European countries.
Other key areas that need immediate intervention are the food sector and the agricultural business. Nowadays, it is necessary to formulate both government and public project proposals to funds and investors with a request to provide support and resources for the restoration and sustainable functioning of these areas of Ukrainian business, because other countries depend on Ukraine's agricultural products. If funding for these areas is not received, the food crisis and, consequently, the economic crisis will have no limits.
We need to bring together all the key top crisis managers in the world and involve them in supporting our business sector.
This is exactly what the Association of Sustainable Development Experts is doing now, implementing the Sustainability Fund project, so we call for cooperation.
Because the situation in Ukraine has shown that the world is fragile and needs unity and partnership to meet global challenges and ensure the goals of sustainable development, in particular the Goal of Sustainable Development 16: Peace, Justice and Strong Institutions.
When it comes to small and medium-sized businesses, which are currently suffering the most, it is first necessary to adapt the company's development strategy in accordance with the external context, taking into account the impact on business processes, changes in supply chains and customers. After that, it is necessary to assess the possibilities of business diversification, creation of new products / services that are necessary during the war and post-war period. Then it is possible to form partnerships with related industries to increase the value proposition for the end consumer.
What can be done in the conditions of war now and after it is to form an ecosystem. It is created when many partners share a resource. Due to this, they can use collective opportunities. For example, two retailers or two stores want to grow, but moving separately will take much more effort than if they worked together. If these two stores use a common warehouse, then, accordingly, the costs will be reduced.
As for opportunities: if, for example, Company A has contacts in Germany and Company B has contacts in Poland, then working in partnership, they will complement each other and expand their capabilities. That is, the ecosystem is about - the use and distribution of shared resources, costs, opportunities, and most importantly - the addition of value to the final consumer. Another feature of the ecosystem is that the partnership should be between equal, mature companies that are at the same level of development and share values.
Because the situation in Ukraine has shown that the world is fragile and needs unity and partnership to meet global challenges and ensure the goals of sustainable development, in particular the Goal of Sustainable Development 16: Peace, Justice and Strong Institutions.
When it comes to small and medium-sized businesses, which are currently suffering the most, it is first necessary to adapt the company's development strategy in accordance with the external context, taking into account the impact on business processes, changes in supply chains and customers. After that, it is necessary to assess the possibilities of business diversification, creation of new products / services that are necessary during the war and post-war period. Then it is possible to form partnerships with related industries to increase the value proposition for the end consumer.
What can be done in the conditions of war now and after it is to form an ecosystem. It is created when many partners share a resource. Due to this, they can use collective opportunities. For example, two retailers or two stores want to grow, but moving separately will take much more effort than if they worked together. If these two stores use a common warehouse, then, accordingly, the costs will be reduced.
As for opportunities: if, for example, Company A has contacts in Germany and Company B has contacts in Poland, then working in partnership, they will complement each other and expand their capabilities. That is, the ecosystem is about - the use and distribution of shared resources, costs, opportunities, and most importantly - the addition of value to the final consumer. Another feature of the ecosystem is that the partnership should be between equal, mature companies that are at the same level of development and share values.
Sustainable development can be supported by the average citizen
How to keep business open, outlined above, and now we will speak about the sustainable development of citizens. Ukrainian society needs support and encouragement. No matter how hard and sad it was, wars have been and probably will be, as history shows. We need to adapt quickly and live. Then continue to go to your favorite store, look after yourself, family, work.
This is the key. Find creative solutions and look for a job if you lose it. Do not be afraid to change qualifications and experiment. The war has forced us to reconsider our values, and what did not matter before plays a crucial role today. Today we are thinking about who we are and what we can do. The Russian aggressor reminded us of the identity of the UKRAINIAN people. There is a lot of work ahead for each of us. The country needs smart, free, strong citizens to rebuild and establish the economy and further sustainable development.
This is the key. Find creative solutions and look for a job if you lose it. Do not be afraid to change qualifications and experiment. The war has forced us to reconsider our values, and what did not matter before plays a crucial role today. Today we are thinking about who we are and what we can do. The Russian aggressor reminded us of the identity of the UKRAINIAN people. There is a lot of work ahead for each of us. The country needs smart, free, strong citizens to rebuild and establish the economy and further sustainable development.
