[Română] Găsești mai jos versiunea TEXT din introducerea Prezentării lui Constantin Saleta, International Service Leader for Decarbonization and Associate Manager for Climate Strategies la denkstatt group.

”Sunt Coordonatorul departamentului internațional de servicii pentru decarbonizare la denkstatt group. denkstatt este o companie europeană de consultanță în domeniul sustenabilității, iar eu coordonez toate subiectele relevante pentru climă la nivelul întregului grup. Mă aflu în sediul nostru din Austria, dar avem și birouri în România, iar echipa noastră locală este prezentă și ea la conferință.

Suntem activi pe piață din 30 ani, decarbonizarea fiind unul dintre subiectele noastre principale. Ne bucurăm pentru toate tendințele și impulsurile de la moment pe piețe pentru toată regiunea UE și nu numai, pe subiecte care susținem de atâția ani.

Așadar, doar o foarte scurtă introducere, în ceea ce facem. Acesta este serviciul nostru portofoliul de servicii, ceea ce vedeți aici.

După cum am spus, sunt responsabil pentru decarbonizare, unde vorbim despre planurile de tranziție climatică, obiective climatice, bineînțeles, de asemenea, amprente de carbon și alte subiecte.

Iar acest lucru este strâns legat de multe alte subiecte de sustenabilitate pe care le vedeți aici, cum ar fi managementul ESG, raportarea și, desigur, și, de asemenea, finanțarea durabilă, ca exemplu.

Dar doar pentru a fi concis și pentru ca să vă anunțăm cine suntem, acum trecem la subiectul de astăzi.

Așadar, când vorbim despre decarbonizare și managementul climatic pentru companii, încercăm să o structurăm în cinci piloni diferiți.

Astfel, primul se referă întotdeauna la datele și informațiile.

Deci, există amprenta de carbon, de bineînțeles, ca fiind cea mai importantă bază de referință informații de care veți avea nevoie în calitate de companie care se pregătește pentru toate subiectele de aici.

Un alt subiect este riscul climatic managementul climei, pe care nu îl vom aborda astăzi, ci doar pentru a fi complet aici. De asemenea, riscuri, dar și oportunități pentru companii trebuie analizate și elaborate, în detaliu, astfel încât să înțeleagă în ce direcție se îndreaptă și pentru a fi, de asemenea, pregătiți pentru viitor strategiile și modelul de afaceri.

Obiective bazate pe știință sau obiective climatice, strategiile climatice, acesta este unul dintre principalele subiecte la care lucrăm în prezent, astfel încât
ca, pe baza amprentei de carbon, deci a status quo-ului, să sfătuim companiile cu privire la ceea ce ar putea aduce viitorul și cum ar trebui reduse emisiile dvs. pe termen scurt, mediu și lung.”

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[English] Below is the full transcript of Constantin Saleta’s Keynote from Romanian ESG Summit 2023.

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”I am the international service leader for decarbonization at denkstatt Group. denkstatt is a European sustainability consultancy and I’m coordinating all the climate relevant topics group wide. I’m located in our Austrian office but we also have offices in Romania, and our local team is also present at the conference.

We are active on the market since 30 years now decarbonization being one of our main topics and we’re really… Glad for all the trends and push at the moment in the markets for all the whole EU region and beyond on the topics that we stand for since those many years. So, just a really short introduction into what we are doing.

This is our service portfolio, what you see here. As I said, I’m responsible for decarbonization, where we talk about climate transition plans, climate targets, of course, also carbon footprints and other topics. And this is strongly related to many other sustainability topics that you’re seeing here, like in ESG management, reporting and of course, also sustainable finance as an example.

But only to be concise and to let you know who we are now going into the topic of today. So when we talk about decarbonization and climate management for companies, we try to structure it in five different pillars. So the first one is always about the data and the information. So there’s the carbon footprint, of course, as the most important baseline information that you will need as a company preparing for all the topics here.

Another topic is climate risk management, which we’ll not touch upon today, but just to be complete here. Also risks, but also opportunities for companies should be analyzed and worked out in detail, so to understand what direction you’re heading on and to also future proof your strategies and business model.

Science based targets or climate targets, climate strategies, this is one of our main topics that we are working on so that based on the carbon footprint, so the status quo, we advise companies on what the future could bring and how your emissions should be reduced in the short, medium and long term. And to fulfill this transition plan, this time in between, between the status quo and your targets in maybe 2030 or beyond, with details and with information, the topic of the day is climate transition plans.

Here it’s about planning and structuring this transition. So this years in between between the status quo and your target horizon with information that the regulators, your stakeholders, but also, and I think most importantly, actually, the financial market participants will need to assess where you stand on ESG.

How ambitious you are and if you fulfill also your commitments and ambitions here. Lastly, climate reporting and governance also important as an enabler to embed this topic in the organization and of course to disclose on a regular level to use external stakeholders where you stand, what your performance is and where you plan to go.

This is not something that kind of, we, we thought about what would be needed and useful. This is also embedded in the upcoming EU regulation on sustainability disclosures as part of the corporate sustainability reporting directive, CSRD and underlying European Sustainability Reporting Standards, ESRS.

So this is a short summary of what’s in the future. Companies in the whole EU will need to report on and disclose in their annual reports, so that’s why. Now it’s a good time to start preparing for this upcoming disclosures and think about how to embed and integrate this information in your management systems.

And today we will talk about one of these elements, climate transition plans. From my perspective, one of the most exciting things actually, because many companies are quite experienced with carbon footprints. Some have set targets, some have managed and analyzed their risks and opportunities, but not so much companies you will find at the moment out there who have dared or have been confident enough to disclose publicly a climate transition plan, especially which already complies with all these upcoming requirements set by the EU regulators.

So this is really something for the most ambitious companies at the moment, but in the future, keep in mind that everybody needs to disclose information on this topic. So actually, what is a climate transition plan? We try to structure it in two ways. One is the compliance perspective. So what are the requirements from a regulation perspective?

And the other thing is what we think is the best way to implement that to also reap your benefits and think about a future proof of your business model and your product portfolio, for example. Rather sticking to the compliance perspective in this slide, I would like to draw your attention to the graphic embedded here.

This is coming directly from the ESRS, so from the emerging regulation, where you will see what is expected from companies to disclose in their future annual reports. I’m not talking about sustainability reports, I’m really talking about annual reports, I’m talking about management reports and financial filings.

You will see that it all starts again with the carbon footprint on the left side. Then most companies want to grow. Also your emissions tend to grow if your business grows. So you will have an increase in emissions by business as usual scenario. And then you will set targets. For example 2030. This is the mandatory time horizon set by the CSAD requirements, but also maybe beyond if you think about net zero targets as has been discussed in the panel before me.

So we know where you stand. We know where you’re trying to heading in the next maybe five, 10 years, or even beyond when you talk about net zero, but what about the time in between? How do you really want to achieve these targets? What does it mean for your business model? Do you still be a profitable company and how will your product portfolio transform enable to bring down these emissions as you plan to do?

This is the topic of the Climate Transition Plan, and here you should bring confidence to your stakeholders, and as I said, mostly also to your financial stakeholders, investors financiers, banks, and also insurance companies, what this transition and the seriousness of your climate ambitions and targets would mean for the company and your business model.

So to fill this transition phase with details, with life, with actions, but not only talking about the climate perspective of energy efficiencies, switch renewable energy, new business innovations, new products and services, but also the financial perspective. What does it make to your revenue? What CapEx and OpEx be impacted by really introducing and integrating those actions?

And in the end also when you talk about the taxonomy, for example, what does it make with your taxonomy alignment and your taxonomy plans on this topic. So it’s really about bringing it all together. Talking about climate risks, opportunities, taxonomy everything should be aligned and approved by the top management and the supervisory bodies of the company.

And in the end it should provide you a blueprint about the next actions you will take next year. The year after and until 2030 in detail. So this is a climate transition plan. And this is, as I said, embedded in the upcoming EU regulation, but it’s also from a non compliance perspective yet spoken. It is something that is recommended to do for companies because it is a good way of strategic planning.

If you take climate action seriously, it is something that the financial market demands more and more for companies. What we also experience is that more and more business partners and B2B customers demand such topics from, from clients and companies and suppliers. And you can see down there, CDP, Transition Plan Task Force is a UK based initiative sponsored by the UK government.

Women in Business Coalition, so those are the global players who will push this topic more and more. That’s why I’m convinced that in 2024 we will see more and more. of these transition plans on the corporate landscape in the EU, but also globally. The most detailed guidance is from the traditional transition plan task force in the UK.

So you will see if you go to the website, there’s really an extensive guidance package for companies, but also financial actors who want to prepare for this. And we will talk about this in a few minutes. So what are exactly those regulatory requirements that I’ve been talking about now? This is our summary of the European reporting standard when it comes to climate change.

So the ESRS A1, for the ones who are familiar with that, this is our summary of restructure, this upcoming disclosure requirements. You will see in the top cluster that everything is about decarbonization. Again, starting with the carbon footprint, energy KPIs, then setting targets in disclosing your climate transition plan, but also a lot is about climate risk management.

As I said, identifying, assessing, and then also managing your climate related risks. But on the other hand, also opportunities is important for companies to be really aware of where you have exposure, but also where, which benefits and opportunities you can, you can benefit from here. And then there are some other topics which are also related to that and will be asked for by companies to integrate in annual reports, like internal comp pricing or also governance related aspects, like how the remuneration of your top management is linked to achieving your climate targets, how much of the euros spent or money spent here is linked to the, to some KPIs, which have a climate focus.

Now you see climate transition plan, only one element of many here. But on this slide we try to search for the, for the linkages. And you will see, when you look at this, really. Kind of yeah, boring regulative documents. But also if you think about the, the consequences of implementing such a climate transition plan, there are so many synergies with other topics.

And only a few topics where you can really say those are not directly linked to a climate transition plan. For me or for us at denkstatt, a climate transition plan is the one topic if you work on that if you get this thing right, then you’re really well prepared for the upcoming regulation on disclosures, satisfying financial market participant needs on this topic, and also having a convincing story to tell to your stakeholders.

As I said, this is the regulation, this is what needs to be reported on in the future. And there are some other initiatives which beyond compliance give you a good guidance and a good framework, how to use this topic, how to use your transition plan really for your financial benefits and for a strategic restructuring and future proofing of your company.

And I think the best way they also call it the gold standard for this topic, as I said, is the UK based transition plan task force sponsored by the UK government, because the UK is also demanding a lot of information on transition plans from companies now, but also more in the future. And to give companies a good guidance document at hand, they founded this task force.

In the EU we don’t have the, a similar equivalent of that. That’s why we are only always working with this UK based initiative as a guidance document. What you will see if you look in those documents, and there are more than 40 of them now out there, are sector specific guidances, implementation steps examples, but there is one central document, this is the guidance framework, and when you look at that, you will see it is structured in different elements.

Everything starts with the foundation. but it’s also about engagement with the value chain, engagement with other institutions, also engaging with your competitors. It’s about governance and many other related topics that we already talked about in the ESRS perspective. So a lot of overlaps between what is required from companies in the EU, what is recommended to do by companies in the UK and also globally.

But there are some elements which we worked out for you which show where the UK initiative goes beyond the ESRS requirements. And I think it is really worthwhile if you want to take this topic seriously and to also reach those business benefits from working on a climate transition plan. To also look at those elements, for example, culture.

For example, upskilling of your workforce or also upskilling of the management and supervisory bodies so that they really understand the What is a transition plan? What are scope 1, 2, 3 emissions? What is a science based target? And what does it mean for my company if you talk about climate risks and climate opportunities?

This is something which is quite new to many corporate leaders but it is important for this transitioning, for this transformation of the whole market, but also of the different entities and opportunities that there is a lot of knowledge and awareness of these topics. So, I hope it was interesting for you so far.

What is a climate transition plan? What are the upcoming requirements? What are guidance documents? But I guess many of you are thinking about now, how can I really embed this in my organization? We developed an approach for that, which we’re already testing and implementing with different companies in diverse sectors and industries.

And again, you see, you will find many similarities. So there is always the starting point to have your carbon footprint, to have your data right. Without data and specific information, quantitative information, you will never… Go into a strategic planning or a strategic risk management, for example. So always start with the carbon footprint.

But as I tell my clients, don’t strive for perfectiveness here. Nobody gets scope free right in the first year, in the second year, but also maybe in the 10th year. You will never get scope free data perfect. So just work with some first estimates with the data that you have at hand. And then take the next steps.

Think about your targets. Think about which actions can you take to reduce your emissions, work on your transition plan, of course, but also embed this in your organization increase the awareness of that and increase the accountability of the different people in the organization. So link this to targets, link this to remuneration.

and make this really steerable inside the company. Of course, if you have done all of these things in the background, it’s also about disclosing this information in line with the upcoming requirements. And therefore you will need the approval of the top management and also of the supervisory bodies.

I think this is a big step for many companies to talk to your leadership about stuff they have not heard so much about in the past. So it also raises the level and the awareness for these topics, of course, inside the companies. And last, what we call climate governance. As I said, it is important to embed this in the organization, to make each and one of the employees accountable for that.

And also go beyond your company borders. Talk to your suppliers, talk to your customers, maybe talk to your neighbors and your local communities in this topic, because there are so many issues involved with transition planning. It’s not about. only technical aspects, but only really also about social aspects which come with that.

Alongside that there are other requirements like a climate risk analysis we already talked about, or also taxonomy related aspects, which will bring a lot of bureaucratic burden to companies doing this for the first time. I have to be transparent about that. It will not be an easy task, but I think it’s worthwhile to, to link both worlds together, this climate management and the taxonomy, because in the end this is exactly that information that the financial stakeholders will look for in future filings and reports.

What is the taxonomy alignment of a company? How plans the company to increase those alignments? And how can I, as a bank, for example, integrate this in my required disclosures on this topic in the end? It’s also about identifying opportunities from this transition. No business wants to implement a transition plan without thinking about what’s this doing to my financial planning and to my business model.

So think about which additional revenue streams you can generate, cost optimizations you can reap from that. And maybe new products you can develop on this topic. So this is an important thing, I think, which should not be left out. But also, physical climate risks play a major part here to evaluate which of your locations, operations, or also maybe locations of your business partners and suppliers may be affected by climate risks, like floodings, like heat waves, and things like that, and how you can manage and mitigate those risks from your perspective.

Now come to some examples. You will hardly fight any example out there, which is aligned, compliant with all the European requirements so far, because there’s a lot which is asked by companies, but still there are some good examples which go into this direction. One of them is the company Ball, which is the world’s leading manufacturer of aluminum cans.

They issued this this report half a year ago, maybe. So in the beginning of 2023. And you will find information about they have set science based targets, they have science based target validated net zero targets. Here you will find information how they plan to reach those targets in the short, medium and long term.

And how much the different actions they plan to take also contributes to the reduction of emissions. You will also find rather qualitative assessment regarding how to reach the 2030 target. But then also you will find in the report, which has like 70 or 80 pages actually information about how their net zero target should be reached.

And what I’d like most actually is this part of the report, you will find information about a risk and cost analysis. It is not compliant with the up and coming regulation, because there you will need to have much more quantitative information on this topic of the risk and cost and yeah, analysis, but still it goes in the right direction where you will find information about how much direct control does the company have of implementing all the different projects and initiatives it plans to do.

What is the, yeah, qualitative aspect of implementing those initiatives from a cost perspective and actually what is the technology readiness and the market readiness of the different technologies they will need to reach net zero in the long term. Another example and you will also see this at the back at the, at the wall in a slightly different format, I think, is from Coca Cola Atlantic, which we are working with since many years from a HQ perspective.

They also issued a couple of weeks or months ago their climate transition plan. Which also is linked, of course, to their science based targets, so their long term climate reduction targets, and also shows in a level of detail, which is really considered as good practice in the industry, how those targets will be met by different initiatives.

But they also talk about needed investments, what kind of capital expenditures do I need to reach those targets. And what I really liked about, they also talk about how they finance this transition, for example, via the tool of a green bond they issued, which will help them in supporting initiatives like recycled bed purchases, energy efficiency measures.

or energy efficient coolers, which are an important part of the carbon footprint. So to link the decarbonization planning with the need for the finance, and also using newer, more sustainably linked finance vehicles like green bonds, I think this is the direction that we will see in many future.

Transition plans in 2024 and two years after last part of my presentation will be which benefits can companies actually now take from this exercise beyond being compliant and having a good strategic outlook for the next years. My impression is and this is based actually on another conference I attended a couple of weeks ago, which was more linked to investor relations and capital market expectations on ESG.

My expectations or the expectations that I, that I kind of captured there were, From a real economy, so from a corporate perspective, there are different stakeholders which have different needs on ESG information. You will have the legislator which is mostly linked to the series ID at the moment, and also the taxonomy.

You will find some experi some expectations from the market, so from your customers, which will need information and demand information from you on other ESG. topics like comfort brands, science with target, or maybe also the social, the sort of S component of ESG, which is embedded in the upcoming due diligence directive.

Then from an information perspective, what I learned in this conference was that investors and rating agencies might have slightly different expectations than banks and financing institutions, which makes it of course. Complicated and complex for corporates to meet all those different expectations.

While I had the impression that banks and financing companies at the moment look more for the taxonomy KPIs taxonomy. Investors and rating agencies and asset managers tend more to really go for science based targets and the implementation of actions, so the climate transition plans in the end, when they engage with companies and want to learn more about their ESG ambitions and performance.

So there’s a diverse set of expectations. And I also already used the word of transition finance, which is a quite a newer topic in my perception. The European Commission issued a paper on transition finance in June this year. And since then, the term is more and more used in different publications and events and conferences.

So transition finance is the finance, but may also be the investment or insurance or the different financial activities which support the transition of the whole market, of the whole economy to a net zero and more sustainable future. So quite a broad term. And this graphic is, is based on this EU publication by the European Commission.

In the end it can be different transition finance vehicles which then are embedded in this, in this framework, like green bonds, sustainability linked bonds or other equity finance vehicles. How do companies now link this upcoming vehicle financial tools, vehicles to their finance needs? And there, the…

Thinking, the idea of the reading commission is that this could be done by transition plans, this could be done by taxonomy disclosures, or by other disclosures of companies like their disclosure of setting a science based climate target. So, like we saw in the example of Coca Cola Hellenic, companies actively and transparently disclosing this information to the market, and also linking.

Their ambitions with the finance needs they might have in the future. And then of course, not publicly, but in the background, talk to your financing partners and find common ways, collaborate on innovative solutions, how this transitioning can also be supported by the equity financing. Last slide before the lunch break.

Transition finance is a future opportunity. What you see here, and I only want to point your attention to the right side, this comes from the Glasgow Finance Alliance on net zero. This is the major international… community and initiative by financial actors when it comes to climate action. So a lot of the big insurance companies, asset managers, banks are part of this initiative and are also committed to the goals of this initiative.

And what you see here is the term of transition finance will gain more and more importance in the future. The expectation is by 2025 that net zero is embedded in the financial industry and that financial actors really take this seriously. And in the end, that means that banks, asset managers, insurance companies will actively ask companies for their transition plans, for their climate targets, how high are your emissions and how you plan to reduce your emissions in the future, how can we as the financial community support this transitioning and this transformation.

So I think this is a good message for corporates, that the financial industry is ready to support you on the way but of course you need to do your homework and get your data and information ready for that. Thank you very much!”