Activities of the European Business Association to Increase Sustainable Investments in Georgia

Interview with the President of the European Business Association (EBA), Mr. John Braeckeveldt

According to the vision of EBA, Doing business in Georgia will be the same as doing business in Europe. EBA facilitates the development of trade and investment between Georgia and Europe. Could you tell us more about activities in this regard? And what needs to be done to do business in Georgia and Europe in the same way?

To achieve its vision, EBA engages in various activities aimed at facilitating economic cooperation and harmonization of business practices between Georgia and European countries. EBA actively utilizes a public-private dialogue mechanism and engages with policymakers in both Georgia and Europe to advocate for regulatory reforms, trade liberalization, and the removal of barriers to investment. This involves sectoral advocacy for the adoption of business-friendly policies and regulations that align with European standards and promote a conducive business environment.
Moreover, EBA organizes networking events, business forums, and trade missions to foster connections between Georgian businesses and their European counterparts. EBA hosts the EU-Georgia Business Forum on an annual basis as a main business event in Georgia. These platforms provide opportunities for businesses to explore potential partnerships, joint ventures, and investment opportunities across borders.
To achieve the vision of making doing business in Georgia the same as doing business in Europe, continuous efforts are needed from both the public and private sectors. This includes further streamlining regulatory procedures, enhancing infrastructure, investing in education and skills development, and promoting innovation and entrepreneurship.

What are the main challenges and opportunities that the private sector currently faces while exporting to the EU?

Meeting EU standards, navigating regulatory frameworks, and upgrading infrastructure pose significant challenges. Compliance often demands substantial investments in technology and skills. Geographic distance and logistical hurdles raise costs and delivery times.

However, the EU represents a large and affluent market with diverse consumer preferences, offering significant potential for expansion and increased revenue. Access to the EU market can also stimulate innovation and competitiveness within the Georgian private sector as companies adapt to meet European standards and consumer demands.

EU granted candidacy status to Georgia; what will be new opportunities for the private sector?

With Georgia’s EU candidacy status, the private sector stands to benefit greatly. This upgrade boosts investment appeal, fostering confidence among investors. Access to EU markets becomes easier with trade agreements, expanding export opportunities for Georgian businesses.
Furthermore, candidacy status often brings increased financial support from international institutions, potentially fueling growth and innovation for private enterprises. Aligning with EU standards encourages competitiveness and quality improvement among local businesses. Overall, Georgia’s businesses are poised to thrive and contribute more to the country’s economic development.

Foreign investment plays a crucial role in Georgia’s economic growth. How can investors’ trust be built, and how can the government leverage all available opportunities to attract investments into the country?

Building trust with investors is crucial for Georgia to attract foreign investment and stimulate economic growth. Key strategies include maintaining transparency and predictability in government policies, establishing clear investment frameworks, minimizing bureaucratic obstacles, and upholding the rule of law.
Government and business leaders should also promote Georgia’s competitive advantages – Georgia as a brand to attract investment effectively. By prioritizing investor trust and leveraging strengths, Georgia can drive economic growth through foreign investment.

What role do business associations play in promoting sustainable financing, and what strategies can they employ to encourage sustainable investments and more sustainable business practices?

BSOs play a crucial role in promoting sustainable financing by acting as intermediaries between businesses and financial institutions, governments, and other stakeholders. They can facilitate knowledge sharing, provide resources, and advocate for policies that support sustainable investments. Business associations can organize activities to educate their members about sustainable finance options and best practices. By fostering collaboration and sharing success stories, they can inspire businesses to integrate sustainability into their operations and investments, ultimately contributing to a more sustainable economy.

How well is the private sector prepared to transform its business models into sustainable business models, and what are the main challenges in this regard?

In Georgia, the private sector is gradually acknowledging the need to adopt sustainable business models due to factors like rising consumer awareness, regulatory pressures, and the pursuit of long-term profitability. However, key challenges include a lack of awareness among companies, especially smaller enterprises, and limited access to financial and technical resources.
Resistance to change within traditional business structures is also a hurdle, as sustainability often demands fundamental operational and mindset shifts. Addressing these obstacles necessitates collaborative efforts from government, industry associations, and educational institutions to offer support, guidance, and incentives for businesses to integrate sustainability into their core operations.

What are your recommendations for businesses and governments regarding sustainable finance and SDG Agenda 2030?

As the President of EBA Georgia, I strongly advocate for businesses and governments to prioritize sustainable finance and implementing the SDG Agenda 2030. Firstly, businesses should integrate sustainability principles into their core operations, including adopting eco-friendly practices, investing in renewable energy sources, and promoting responsible supply chain management. This not only enhances their reputation but also fosters long-term viability in an increasingly environmentally conscious market.
Moreover, collaboration with governments is crucial to creating a conducive regulatory environment that incentivizes sustainable practices through tax breaks, subsidies, and other financial mechanisms. Public-private partnerships can drive positive change towards a more sustainable future, benefiting society and the environment while ensuring economic prosperity.

Can you share insights into the latest trends in sustainable investing, such as impact investing, thematic investing, and the integration of the SDGs?

Sustainable investing has gained significant traction in recent years, driven by a growing awareness of ESG factors among investors, increasingly seeking opportunities to align their investments with specific thematic areas such as renewable energy, clean technology, and healthcare innovation, thereby contributing to positive societal outcomes while pursuing financial gains. Moreover, there is a noticeable trend towards the integration of the SDGs into investment strategies, which involves incorporating SDG-related criteria into investment decision-making processes and assessing the contribution of investments towards achieving the SDGs.

Overall, sustainable investing is no longer viewed as a niche approach but rather as a mainstream investment strategy that offers the potential for both financial and societal returns. In Georgia, as elsewhere, there is a growing emphasis on sustainability across various sectors, and businesses are increasingly incorporating ESG considerations into their operations and investment decisions to meet the evolving expectations of stakeholders and contribute to a more sustainable future.