The ESG initiative : an analysis of the local market

Abstract

Climate change and its devastating effects are an ever-growing concern. Over use of natural resources have caused the earth’s temperature to rise at an alarming rate. This growing concern has not gone unnoticed and several regulations, policies and frameworks have been developed to help limit the earth’s rise in temperature, mainly through achieving a net-zero emission goal. The United Nations and the European Union are spearheading this movement, having released targets such as the Paris Agreement, and policies such as the EU Taxonomy. The aim of this study is to understand how large a role sustainability plays in the local market, through ESG considerations. The market evaluation consists of several interviews with representatives from various stakeholders, as well as an analysis of the Malta ESG Platform, which provides real data on company measures. The study evaluates both the successes and shortcomings in the market, with an emphasis on the change brought about through an increase in regulations. The main regulation discussed in this study is the Corporate Sustainability Reporting Directive, which was proposed in 202, and will capture all listed entities, not simply institutions with over 500 employees. This change will be significant for Malta, since most of the economy is made of SMEs. It was observed that most Maltese companies were unaware ESG credentials, and this upcoming regulation, and that the ESG movement in Malta, is very much spearheaded by the Government. The main recommendation was that there should be an increase of awareness, to bring about a more proactive approach to ESG investing and implementation, not only to abide by regulation but also to reap its benefits.