articles | 26 February 2024

Cyprus businesses to be evaluated according to ESG criteria

The Artemis Credit Bureau, which collects and provides information on the financial behaviour of individuals and businesses in Cyprus, will begin evaluating businesses based on Environmental, Social, and Governance (ESG) criteria as of March 2024, according to general manager Yiannis Tomasides.

He explained that Artemis, in collaboration with the Association of Cyprus Banks, has entered into a strategic partnership with the international Credit Bureau CRIF S.p.A, allowing it to implement a solution for the assessment of companies concerning their compliance with ESG criteria. “Assessing companies based on ESG criteria and adopting an ESG strategy has now become imperative for businesses,” he said, adding that “it is valuable for businesses of all sizes, sectors, and activities to chart a course and direct their efforts in this direction for their benefit”.

Speaking to the Cyprus News Agency CNA), Tomasides explained that in the initial phase, banks will inform companies in Cyprus that choose to be evaluated based on ESG criteria. He mentioned that Artemis, as a hub in this significant interbank project, serves as the connecting link between companies and Cypriot banks with which companies collaborate. Artemis’ general manager further explained that the assessment of companies will be conducted through a specialised questionnaire covering all sectors in Cyprus, with qualitative and quantitative characteristics. Companies themselves will be invited to answer, and the questionnaire will be posted on the electronic platform called ‘Synesgy’.

According to Tomasides, the Synesgy platform is essentially a global alliance of companies that strengthen the transition to sustainability with data collected through an innovative digital platform. It provides each company with its own assessment, including its entire supply chain, regarding the three pillars of sustainability (Environmental, Social, and Corporate Governance). “Beyond the companies themselves, the Synesgy platform simultaneously supports the banking sector by providing a ‘sustainable financing’ tool, supporting the credit risk management policies of banks based on their supervisory requirements,” he said. “ESG assessment allows financial institutions to direct lending strategies towards more sustainable, responsible, and transparent companies,” he added.

Meanwhile, ESG Project Leader at Artemis Credit Bureau Dimitrios Bourpoulas, told the agency that the Synesgy platform is already available in 76 countries on four continents and in 27 languages. He added that to date, 620,000 invitations have already been sent to companies worldwide through the platform. The platform complies with all requirements according to international and European directives regarding ESG criteria and will contribute to the proper assessment and continuous development of businesses in a sustainable direction, which is the desired goal.

Bourpoulas said that each company, regardless of size, can benefit from the assessment through the platform and receive its ESG certificate, which has a duration of 12 months. “The foundations are laid for what will come in the future,” Bourpoulas said noting that “at this stage of the platform’s operation, it is important to create a culture in businesses for what will come in the future”. “It is essential for companies to realise the value of integrating ESG criteria into their strategies and practices, primarily for their benefit,” he added.

The current period represents a transitional stage regarding ESG criteria, but “gradually, these criteria will become mandatory even for companies themselves,” he added. He explained that it is, therefore, a tremendous opportunity for companies at this stage to invest in new technology and non-financial data management systems for the proper integration of ESG criteria. In more detail regarding the questionnaire, Bourpoulas said that based on the information entered in the questionnaire, the company will automatically receive the ESG certificate, which can be published on the organisation’s website and other communication channels.

The company will also receive the ESG score, the Action Plan of the organisation with prioritised suggestions for improving its performance in ESG criteria, and the questionnaire itself with answers in PDF format for reporting purposes. “These three ESG criteria, around which legislation and regulatory obligations are gradually being developed over time, essentially lead to the so-called sustainable development of an organisation,” he said, adding that for an organisation to be developmentally sustainable, it must perform well in all three pillars of ESG. 

Moreover, he noted that the legislation and regulations being developed in the EU on the issue of sustainable development initially affect the capital market and the banking sector and, at the same time, begin to affect the companies themselves. “While a bank must assess its clients based on financial criteria, it will gradually begin to examine them based on sustainable development criteria,” stated.

Source: Cyprus Mail

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