On March 6, Mediamax Media Company and Skill Marketing Company held the first Robust Armenia conference entitled “Sustainable development and ESG: global agenda, local needs”.

Robust Armenia has been established as an annual conference to serve as a platform for discussion of Armenia’s sustainable development issues by representatives of the private sector. In addition to the annual conference, a series of other events will also take place throughout the year to continue discussions of sustainable development issues in different formats.

The partners of Robust Armenia 2024 conference were Zangezur Copper Molybdenum Combine, Converse Bank, ARARATBANK, Unibank, Grant Thornton Consulting, Green Rock Management Group, Philip Morris International and the UN Office in Armenia.

The keynote speaker at the conference was Jon Dee, Co-founder and President of Do Something!

Banks.am presents excerpts from the speeches of the conference speakers.

Sustainable development agenda in business

Rayisa Babayan, ESG Responsible at ARARATBANK

ARARATBANK has adopted a policy aligned with sustainable development and ESG (environment, social and governance) standards. This can ensure competitiveness, because without the “green” agenda and adherence to ESG standards, the future and well-being are impossible.

Securing financing from our bank for the acquisition of electric cars and the construction of energy-efficient buildings can contribute to mitigation of risks. It will also help the state to advance “green” agenda.

Azat Manukyan, Partner at Grant Thornton Consulting

To understand why sustainable development as an agenda is rapidly developing and entering business today, we need to first understand what is happening on international platforms. Today we see a trend of movement of capital towards the sustainable development sector, sustainable development projects.

The legislative framework can also contribute to advancing this agenda, but business must also recognize its influence and respond to the challenges.

Anna Salome, Marketing Director at Green Rock Management

Green Rock Management seeks to demonstrate through its example that businesses can take proactive steps and implement important projects regardless of legislative regulation or state intervention.

We are implementing a number of business and social projects in Yerevan and Dilijan. In Dilijan, we are building a sizable multifunctional complex encompassing various business ventures. However, we are interested in the development of areas in general and have initiated several projects aimed at ensuring sustainable development in Dilijan.

Irina Zhukova, Regional Director on Sustainability at Philip Morris International

For us, sustainability is the core of our business strategy. We help the companies to incorporate sustainability strategy and make sure that they are implementing the right governance. Sustainability requires cross-functional cooperation. For us, it is very important to have cross-functional cooperation.

Philip Morris International operates PMI Science centers in three countries, one of which is Armenia. Our choice to establish a center here stems from our confidence in the fundamental science existing here. Armenia warmly welcomed us, it is open to international investors and has a good scientific base. This also served as a factor for our selection. Over 5 years, around $20 million has been invested in the Armenian PMI Science Center.

Armenia is also one of the pioneers in our waste management programs.

Anna Saghabalyan, Deputy Director on Sustainability at Zangezur Copper Molybdenum Combine

Today, companies increasingly engage ESG specialists. Three primary directions make companies incorporate this agenda into their practices: external pressures from the public and shareholders, legislative regulations, and the initiative to enhance competitiveness.

Adhering to ESG standards, proves to be financially beneficial when efforts are appropriately directed. Presently, financing the “green” agenda is becoming crucial. There will be no other funding in our field within the next decade.

ESG strategy in companies

Rayisa Babayan

Our bank’s ESG strategy aims to proactively manage and mitigate the impacts stemming from the activities of our borrowers as well as to regulate our own footprint of activities, such as waste management.

Anna Salome

Our strategy can be defined as follows: striving for energy-saving construction, adhering to all “green” building standards, as well as maximally controlling the footprint of our activities.

Azat Manukyan

From the ESG strategy perspective, the consulting business primarily impacts social aspects, which inherently also affect the environment to some extent. Our influence predominantly steers the direction of sustainable economic development and educational objectives.

Our strategy is to contribute to economic growth by investing in the education of our employees, thereby ensuring that we advance and serve the sustainable development agenda of our potential customers and the broader business community.

“Armenia 100”, challenge-suggestion

Jon Dee, Co-founder and Director of Do Something!

I am known in Armenia for the work I have done on Rock Aid Armenia, but the main thing I have been doing is working with business on sustainability and environment.

My suggestion and challenge to Armenia is to go 100% renewable by 2035. It is actually really easy to do, because so many major banks and financial institutions will provide cheap money to Armenia. You do not have to worry about the costs, the sun is free, it will always will there, the wind will also be there. Armenia should follow this advice, electrify everything and get rid of gas.

“Sustainable development in an unstable environment”

Artur Mkhitaryan, Head of Operations Divisions at Converse Bank

Until 2020, everyone was thinking about the use of technology, more optimal organization of business processes, but 2020 forced businesses to find more effective ways for process-building. In unstable situations, you have to find non-standard solutions that will be effective and convenient for everyone, in this case, not only for the business, but also for the client, environment and society.

Artur Mkhitaryan

Recent research shows that trust in business often surpasses the trust in governments and public bodies, due to businesses’ tendency to make more stable and consistent decisions.

Levon Grigoryan, Compliance Director at Unibank

One of the biggest achievements is the adoption of a remote work culture, which made the work schedule more flexible.

In terms of customer relations, a notable achievement has been the increase in trust. Over the past four years, we not only retained our existing customers but also attracted additional funds, as evidenced by concrete figures: a 35% surge in the deposit portfolio and the rapid placement of issued bonds. In February we distributed bonds worth approximately 2 billion drams.

Armen Stepanyan, Director for Sustainable Development at Zangezur Copper Molybdenum Combine

The coronavirus pandemic was viewed by many mining organizations as a test or an indicator. It provided an opportunity for the mining industry to demonstrate a shift from words to action. Major organizations exhibited exemplary behavior by halting production, underscoring the paramount importance of human life.

The 44-day war posed another significant test for Armenia, with the mining industry directly and indirectly impacted by it. Collaborating closely with the government, we provided essential support such as vehicles, medical aid, and supplies. Despite the numerous obstacles, all mining companies successfully navigated through this crisis. However, the security concerns followed and our sector again stood by the state.

ZCMC has overcome all challenges with relative success. Each challenge creates new opportunities, shows where the company needs to be improved.

Funding to “green” companies

Artur Mkhitaryan

Over the past 2-3 years, Converse Bank has cultivated a portfolio totaling approximately 5 billion drams. This funding has facilitated various initiatives, including the financing of Armenia’s first photovoltaic power plant, the implementation of extensive energy-efficient mortgage lending programs, and support for the steadily growing agricultural sector.

When examining investor behavior in international markets through an ESG lens, studies suggest that approximately 80% of investors prioritize a company’s being “green” alongside profitability. Consequently, even if a company demonstrates high profitability but is not “green”, investors may opt to abstain from investing. Being part of the global economy, banks should align their financing practices accordingly.

Levon Grigoryan

Unibank has developed a Green Bond Framework concept, under which our forthcoming Green Bonds will allocate 100% of the raised funds towards initiatives aimed at enhancing energy efficiency, promoting accurate use of natural resources, and purification of water resources. We have an ambitious milestone that we are striving to achieve.

Transparent and clean mining

Armen Stepanyan

Transparency and trust are two of the most important challenges facing the mining industry. There are various tools for ensuring transparency and public accountability is one of them. The report on ZCMC’s Sustainable Development, which we publish for the second year in a row, is a vivid example of this. In it, we boldly talk about our achievements and problems. Mining is one of the most targeted sectors in the world surrounded by a lot of stereotypes and myths.

We were not the pioneer in publishing a sustainable development report, Lydian Armenia company submitted reports even in the construction stage in 2016-2017, but we are pioneering in another format - we adhere to the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) based on which we conducted research and included the results in the ESG report.

Jon Dee, Co-founder and Director of Do Something!

There are very good miners in the world and there are very bad miners. Many manufacturers in Australia go 100% renewable, and also we are working all together to get very best outcome. There are many companies in the world that ignore environmental rules. What Armenia can do in this regard is to look at the best practice, because there are certain materials we have to have for the transition to the cleaner way of doing business. And we need a successful mining sector that is operating as clean as possible and collaborating with its customers to make sure that from the very moment you did something, up to the moment when it turns into a product, that is done with the minimum environmental impact.

Ani Khchoyan, Arpi Jilavyan

Photos by Emin Aristakesyan