Geisha Kow­lessar-Alon­zo

ESG (en­vi­ron­men­tal, so­cial and gov­er­nance) may just be an es­o­teric term that’s be­ing ban­tered about with no re­al ac­tion in T&T, says busi­ness­man John Hadad.

“The trend is a lot of talk and no ac­tion. ‘NA­TO,’ no ac­tion, talk on­ly and we want to see a lot more,” he said fol­low­ing which he re­ceived an ap­plause from the au­di­ence while speak­ing on a pan­el at the In­sti­tute of Char­tered Ac­coun­tants of T&T’s (ICATT) 13th An­nu­al In­ter­na­tion­al Fi­nance and Ac­count­ing Con­fer­ence (2022) held at the Hy­att Re­gency this week.

“We are still build­ing our busi­ness on bor­rowed mon­ey and we deal with every bank every­where and we deal with sup­pli­ers abroad and lo­cal­ly and with cus­tomers in al­most every con­ti­nent and I have to say there are a few very dis­ap­point­ing things.

“No one has ever asked us where is your ESG pol­i­cy, not even a lo­cal bank has said to us, ‘Do you have some­thing in place, are you even speak­ing about it, what are you do­ing,” Hadad ex­plained

This year’s theme was “Be­yond Fi­nance: Dri­ving Sus­tain­abil­i­ty, Re­in­forc­ing Trust.”

It was de­rived from a three-year strate­gic plan of ICATT which sought to ad­dress and pro­vide a myr­i­ad of prac­ti­cal and the­o­ret­i­cal so­lu­tions to the glob­al, re­gion­al and lo­cal trends im­pact­ing the pro­fes­sion.

Hadad and his two broth­ers, Robert and Joseph, are founders of lo­cal dis­tri­b­u­tion gi­ant Had­co Ltd.

He said their sup­pli­ers, who are multi­na­tion­als, have very strong ESG poli­cies but when deal­ing with com­pa­nies in “less­er de­vel­oped coun­tries” per­ti­nent ques­tions are not asked nor is there in­sis­tence on some of the things which need to be done with­in their own ter­ri­to­ries.

“So what makes that dif­fer­ent? That is al­most a breach of ESG. I want you to chal­lenge us. I want you to tell us that you want us to be­have in a par­tic­u­lar way and not nec­es­sar­i­ly may be give us a time­line; work with us but at the end of the day ask the nec­es­sary ques­tions,” Hadad said.

In shar­ing his own per­spec­tives about what could be done on a wide scale to ac­cel­er­ate the adop­tion of ESG in this coun­try Hadad ad­vised there should be more fo­cus on en­vi­ron­men­tal pro­tec­tion.

And while he not­ed there are many things T&T “gets right” there still re­mains some lev­el of il­lic­it/non-com­pli­ant be­hav­iour.

This, Hadad said, all comes right back to gov­er­nance where there’s a lack of en­force­ment.

And ac­cord­ing to Hadad if it is ad­dressed it will al­so deal with so­cial is­sues, adding that the pri­vate sec­tor can play a crit­i­cal role in this sphere.

In this vein, rather than the Gov­ern­ment tak­ing the lead on ESG, such a strat­e­gy should stay with the pri­vate sec­tor.

“Com­pa­nies have the pow­er to be a so­cial en­ter­prise. We in the pri­vate sec­tor con­trol cap­i­tal and gen­er­ate jobs, and wealth and grow the pie for every­one. We have the pow­er to in­ter­nalise a so­cial con­science and re­al­ly em­bed it,” Hadad added.

He how­ev­er ad­mit­ted that some be­lieve the ESG con­cept is not here to stay but stressed it’s all the more rea­son to push the agen­da.

“We have to de­mand an au­dit. We have to de­mand ac­count­abil­i­ty in that area to make it hap­pen be­cause let’s look at the re­sults if it were not to hap­pen,” he said.

Giv­ing his take on how the ECG process can be ad­vanced CEO of the En­er­gy Cham­ber Dr Thack­wray “Dax” Dri­ver said it’s all about de­ci­sion-mak­ing at a coun­try lev­el.

“It’s re­al­ly tak­ing this se­ri­ous­ly and re­al­ly un­der­stand­ing this change is hap­pen­ing around the en­er­gy tran­si­tion and if we don’t make de­ci­sions we will be left be­hind,” Dri­ver said.

He em­pha­sised that speed­ing up de­ci­sion-mak­ing, there­fore, is ab­solute­ly cru­cial for T&T as a whole if the coun­try is go­ing to be able to deal with en­er­gy tran­si­tions.

Ac­cord­ing to Dri­ver, the whole net-ze­ro push will con­tin­ue as com­mit­ments will con­tin­ue by gov­ern­ments which will feed in­to how com­pa­nies will op­er­ate.

“I’m see­ing from the oil and gas and petro­chem­i­cal in­dus­try in Trinidad a dri­ve to re­duce emis­sions,” Dri­ver not­ed.

Al­so, in terms of op­er­a­tions, he said peo­ple are look­ing at ways to re­duce this, cit­ing that the NGC for ex­am­ple, has in­vest­ed in satel­lite mon­i­tor­ing of its pipeline net­work.

Dri­ver al­so not­ed that this coun­try has a huge op­por­tu­ni­ty of hav­ing ex­ist­ing in­fra­struc­ture in place which can be re­pur­posed to cre­ate low­er car­bon fu­els for in­ter­na­tion­al mar­kets.

“But the op­por­tu­ni­ty doesn’t nec­es­sar­i­ly trans­late in­to ac­tion if you don’t make the de­ci­sion,” Dri­ver ad­vised.

Tisha Mara­jh, group sus­tain­abil­i­ty of­fi­cer, Re­pub­lic Bank who gave some in­sights in­to the fi­nan­cial mar­ket as it re­lates to ESG said this is a sys­tem­at­ic way in which pro­gres­sive busi­ness­es should view how they man­age risks, max­imise op­por­tu­ni­ty, deal with their moral com­pass and even how they treat with rep­u­ta­tion­al risks.

Delv­ing in­to the deep­er trends for the fi­nan­cial and cap­i­tal mar­kets Mara­jh ex­plained from the gov­er­nance side there was “quite a lot of pres­sure” and not just in­ter­nal­ly but al­so from stake­hold­ers.

“But be­cause ESG is such a pub­lic ad­mis­sion of do­ing what is re­quired hence there’s ad­di­tion­al scruti­ny and pres­sure will now grow to en­hance the ESG skills.

“For ex­am­ple, in ap­point­ing C-Suite type of­fi­cials to man­age in an or­gan­i­sa­tion. It’s not CSR (cor­po­rate so­cial re­spon­si­bil­i­ty). It’s re­al­ly a strate­gic im­per­a­tive that you want to fil­ter down,” Mara­jh fur­ther ex­plained.

Ad­di­tion­al­ly, she said in­vestors and clients are al­so de­mand­ing bet­ter ac­count­abil­i­ty and height­ened sus­tain­abil­i­ty, adding that one of the dri­vers of ESG is al­so the cur­rent gen­er­a­tional shift-those who are “very much aware” of mak­ing de­ci­sions based on a bet­ter moral com­pass.

Delv­ing in­to risks which Mara­jh said the man­age­ment of this is key, she said from a gov­er­nance side the sec­tor is look­ing at ESG to min­imise this, cit­ing trans­paren­cy and ac­count­abil­i­ty for ex­am­ple as im­por­tant el­e­ments.

And apart from en­sur­ing the bank’s di­rec­tors and board mem­bers are ad­e­quate­ly trained and aware of busi­ness prac­tices Mara­jh said the bank is al­so look­ing at its type of in­vest­ments which can en­cour­age more shift in­to the ESG tran­si­tion.