Kristina Balciauskaite in an expert Research Manager at Euromonitor International, and has gained extensive experience of B2B analytics in the largest global economies. She provides strategic analysis on all aspects of the global industrial trends and has expanded the scope of her research into broader scope, adding focus on Business Dynamics and Sustainability topics.
1. How can sustainability analysis help companies achieve better results?
First of all, for quite a while now, we have seen industries, markets, consumers and entire supply chains’ dynamics driven by sustainability-induced global or local changes. In some cases, the changes are limiting growth, in others, companies are seizing the potential gains and opportunities, and accelerating their revenue growth.
Tracking and analysing sustainability-related data empowers companies to get access to potential roadmaps on how to use sustainability analysis as a tool for growth as well as a safeguard for companies against potential threats in the future. Moreover, the message is clear: in order to succeed in the global fight against climate change, the private sector must become an integral part of the change, or we will not make it.
Businesses and their stakeholders are unavoidably recognising the threat of biodiversity collapse to their business outlook. Companies are transforming their production lines or shifting the production to be in line with ever-changing consumer preferences on sustainability.
More and more companies are launching large CSR programs to help communities that they operate in. Again, sustainability data is helping such companies to identify key pain points for the companies to focus on.
2. What are your predictions regarding sustainable business performance?
By 2030, according to the Business & Sustainable Development Commission (BSDC), there are USD12 trillion worth of global market opportunities for the private sector to contribute towards the Sustainable Development Goals and they vary by sector. I think the number is much bigger, as every industry’s growth has potential for sustainable growth; you just need to switch the angle. For example, in 10 years, global agriculture and processed food sectors will be worth USD21 trillion.
With looming popularity of sustainable food brands and policies on sustainable farming, a significant share of that USD21 trillion will come from sustainable food companies and farms.
Moreover, we can anticipate that most of the food industry’s RD spending will focus on making food production as efficient and sustainable as possible, with global spending on research and development to reach USD15 billion in 2030 for the agricultural sector alone. Of course, optimisation of food production would present different growth opportunities with, for example, novel animal feed ingredients; reduction of waste, particularly elimination of food waste; plant-based fertilisers, and of course, water recycling and new technologies for irrigation presenting the most prominent sustainable growth opportunities by 2030.
The energy sector is among the most transformative sectors of all, both from an electricity and mobility perspective. With most prominent growth anticipated in renewable energy, electric/self-driving vehicles, EV charging infrastructure and efficiency transformations hold the largest revenue growth potential in the future.
Moreover, sustainable finance is on the rise as well. Investors are moving away from short-term profit, injecting capital into sustainable companies that will lead the way towards a more resilient future. United Nations has launched the “Principles for Responsible Banking”, with 130 leading banks committed to aligning their investments with the Paris Agreement and the SDGs.
3. What do you think consumers focus on when buying sustainable products or services?
According to Euromonitor’s spring Lifestyles survey for 2020, related to sustainability and ethical behaviours, 31.3% of consumers globally buy from brands that support their social and political issues, while 26.4% of global consumers boycott brands that don’t share their social and political beliefs.
Therefore, tracking the changes in consumer beliefs and perceptions of how they see sustainability is becoming increasingly important. The survey also shows that the consumer base that worries about climate change and believes they can make a difference with their purchasing choices is constantly increasing, globally.
4. Do you think CEOs should become activists on subjects such as climate change, zero waste or environmental impact by consumption?
United Nations Global Compact report representing 40 industries and 107 countries, reports that 72% of CEOs recognise the critical role that business could play in contributing to the delivery of the Global SDG Goals, while only 21% believe that business is actually playing a role, and 32% of CEOs indicate their company has or plans to set corporate goals that are sufficiently ambitious in the SDG realm.
It is becoming obvious that we need the private sector to help global economic systems by refocusing, to avoid the climate disaster, and CEOs as visionaries and leaders of their businesses have to become more active. They have no choice if they want their business to succeed beyond 2030.
Businesses not only need to become circular, linear and integrated, but most importantly, think outside the box and abandon safe linear growth expectations with a sustainability vision being part of their mission. The markets and industries are becoming less predictable and safe; historic linear growth is increasingly being disrupted by rising global weather temperatures or as now, health uncertainties. So yes, only CEOs who recognise those trends and integrate sustainability in their visions and actions can have more successful forward-looking businesses and help us reach the global SDGs.
5. What are the top three lessons the pandemic has taught you as a leader?
I guess the biggest lesson I learned is trust in how independent and productive my team can be working on their own. Nevertheless, like everyone, I am also learning the importance and value of human contact and the growing need to be in touch with how my team is feeling. While we all are still working from home, it is becoming increasingly obvious we all miss the social contact we used to have in the office.
I have also learned how written words may have a different emotion and ‘colour’ to the person you are writing to. Digital communication, without the ability to read your team members’ facial expressions and see emotions is stripping us of a lot of tools for better communication. So in some situations, I choose to actually make a call, rather than write, avoiding any potential misinterpretation of a message.
6. According to your market research about Romania, what do you consider to be some of the biggest problems our country is facing in terms of sustainable development?
Euromonitor has constructed the Global Sustainability Index, ranking 97 global economies on key sustainability pillars like, energy, pollution, water, biodiversity, food and agriculture and environmental resilience.
Romania’s lowest ranking is in the global water pillar, ranking 64th globally in 2019. In 2019, almost 15% of the Romanian population did not have access to basic sanitation services.
Moreover, Romania is among the bottom half of nations globally in water withdrawal per person. Declining precipitation in some parts of the country is increasing the risk of water shortages and droughts in the future.
Moreover, the high exposure to climate risk ranks Romania 59th globally in the Environmental Resilience Index.
7. How does Romania look on the global map of Sustainability Goals?
Unfortunately, Romania is at the bottom of the Regional SDGs evaluation score among Central and Eastern European peers. In 2019, significant or major challenges remained across all 17 goals.
According to the EU, in the 2019 sustainability report, Romania was showing positive results in reduction of poverty (goal 1) and decent work and economic growth (goal 8) but was stagnating in quality education, gender equality, and climate action goals.
Romania retracted in reaching the goal of reducing inequality over 2019 (goal 10). Unfortunately, recent post-pandemic challenges will most likely exacerbate the issue of inequality, and limit Romania’s determination in reaching the SDGs during the upcoming recession.
The interview will appear in the bilingual yearbook Community Index Magazine 2020, second edition.