Chart of the Month Vol. 7 | Sustainability and ESG disclosure in Greece and worldwide

In its 7th Edition, HAEE’s Chart of the Month focuses on “Sustainability and ESG disclosure in Greece and worldwide”.

During the last decade, both the interest of the Market and the investors but also the evaluation criteria and the methods of attracting investments have shifted beyond traditional financial indicators to sustainability objectives like “ESG” criteria, which serve as indicators of environmental, social and corporate governance performance and reflect the intention and ability of companies to create value over the long-term strategy. More and more countries, governmental bodies, and industry groups are incorporating and disclosing ESG-related regulations, practices, and guidelines. The backbone of ESG regulation in the European Union is the EU Taxonomy, which defines the activities that will be considered green and sustainable. In this direction, the EU’s sustainability reporting framework is being enriched with the Corporate Sustainability Reporting Standards (CSRS) and the European Reporting Standards (ESRS). 2022 is considered the year of ESG acceleration in the EU’s sustainability monitoring and reporting calendar.

According to BNEF, European countries are leading the race in establishing sustainable finance and ESG disclosure policy, while major economies such as the US, China, and Russia underperform in the sector. The EU scores 7.93/10, as a result of the strict national climate policies and the EU Directives, while the global average score is 6.57/10.
Regarding ESG, only 19 Greek companies have reported their ESG performance in 2020, while 9 of them report a medium to high sustainability performance, proving that the Market is rather immature compared to the EU standards. Greece ranks low in environmental indicators, while in terms of governance there are significant shortcomings. On the contrary, based on the UNSDG index, Greece’s performance overpasses the OECD Members’ average and the country is improving its performance by 0.3% every year.

Despite the heterogeneity in sustainability ratings, it is proven that ESG disclosure policies and sustainability reporting are becoming a necessity for better risk management, cost optimization, and decision-making facilitation for all Market Participants.