When Science Meets Finance: denkstatt Hungary Paving the Way in Sustainability
Sustainability is rising to prominence in the business world, becoming an ever more essential set of strategies that companies who want to be taken seriously must implement. The Budapest Business Journal talks to Csaba Csiszkó, head of sustainability at denkstatt Hungary Kft., about how measuring a firm’s sustainability performance is becoming a must.
Sustainability consultancy denkstatt is the Hungarian affiliate of the eponymous Central European business established and based in Vienna, Austria. The group launched operations three decades ago, and the Hungarian firm has been active for 25 years.
“Nowadays, sustainability has become a buzzword. denkstatt started focusing on sustainability before such operations were ran under this label,” Csiszkó says. In the early days, the consultancy would support businesses with environmental site assessment or permitting and help companies deliver technical solutions. “This was the core, the route, from where sustainability unfolded,” the leader says.
As sustainability has grown into a fully-fledged industry, one that carries vital importance in keeping national economies operational in the near future, denkstatt has expanded along the route of the River Danube.
“The group is present in six countries: Germany, Austria, Slovakia, Hungary, Romania, and Bulgaria, from the Black Forest to the Black Sea. We are also part of Inogen Alliance, an environmental, health, safety, and sustainability consulting network, which gives us deep knowledge of environmental protection and sustainability supported by 200+ consultants within the group,” Csiszkó explains.
Sustainability has been a mainly scientific, engineering or technology-related field, even before the threats of climate change made it a matter of public dialogue. Nevertheless, the denkstatt leader insists that sustainability operations, at their essence, must solve a problem via technical and science-based solutions, such as machine efficiency, resource allocation, or recycling opportunities, for instance.
The necessity for implementing sustainability practices in the corporate world has been amplified in recent years.
“Traditionally, a company’s prime objective has been to generate money. Undoubtedly, profits are indispensable for covering employees’ wages and supporting the growth of a business. But over the years, especially since sustainability has become an integral part of finance in the form of ESG [environmental, social and governance] reports, the corporate world has started entertaining an interest in how they make money, focusing on social and environmental impacts too,” Csiszkó says.
Modern businesses feel ESG pressures. First, from the customer side, with the increasing awareness of consumers about climate change-related issues, a business can lose custom if it is considered non-sustainable. Weak or misleading ESG commitments may drag a company into greenwashing allegations. Put simply, failure to follow proper ESG operations can cut revenues. The third and most relevant cause for urgency to act in legal compliance with e.g. EU rules, like the CSRD.
The second pressure is found in the business environment. A company can find it hard to attract investors and capital injections if it lacks well-worked-out sustainability strategies.
No wonder the most significant international companies now follow well-established ESG operations, with all sorts of data points reporting in to the chief financial officer, as these factors help define share price and global business performance. Those practices are also trickling down to small and middle-sized enterprises (SMEs).
“We are seeing top-down progress. A large company already makes steps to lower its carbon impact. But the largest portion of their carbon footprint comprises their suppliers, the value chain. To improve in these areas, they have started to require their supply chain partners to meet certain certification requirements, which is having a ripple effect on permeating sustainability practices even among SMEs,” Csiszkó says.
How can businesses put ESG into practice? That is where denkstatt can help.
“We were talking about high-level, sophisticated processes and dynamics. But, from a sustainability consultant’s perspective, we have to make these dynamics measurable for companies,” the consultant explains.
“At denkstatt, we have a vast portfolio of tools for making sustainability in a business’s everyday operations measurable. You cannot manage what you cannot measure. We can help businesses understand their baseline, and then we can add our decarbonization technologies and processes into the mixture to help businesses become more sustainable,” Csiszkó says.
The consultancy’s tools, technologies, and processes cover the fields of carbon footprinting, circular economy and resources, decarbonization and business strategy, management systems and compliance, reporting and communication, smart urban management, software solutions, and sustainable finance.
“What we do as sustainability consulting is we approach the top-level theoretical discussion, quantify the climate change goals and translate them to the everyday practical level of corporate operations. So, when a business says they want to improve by a certain percentage in relation to carbon emissions or to move towards carbon neutrality, we can help them quantify their operations and set measurable targets that they can hit, so they start changing their sustainability dynamics,” Csiszkó summarizes.
This article was first published in the Budapest Business Journal print issue of February 10, 2023.
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