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Initiative

Development of a digital tool for evaluating the ESG performance of HRADF’s portfolio (HRADF ESG RATING TOOL)

Development of a digital tool for evaluating the ESG performance of HRADF’s portfolio (HRADF ESG RATING TOOL)
SUBMITTED FROM:

ΤΑΜΕΙΟ ΑΞΙΟΠΟΙΗΣΗΣ ΙΔΙΩΤΙΚΗΣ ΠΕΡΙΟΥΣΙΑΣ ΤΟΥ ΔΗΜΟΣΙΟΥ

The Hellenic Republic Asset Development Fund S.A. (HRADF) was established in 2011 according to its founding Law No. 3986/2011 with an initial mandate to leverage the State’s private property assigned to it by the Hellenic Republic. HRADF operates to serve the public interest, according to the rules of the private economy. The utilization development and utilization of public property are implemented in accordance with the prevailing market conditions and with guarantees of full transparency. HRADF adopts and implements the Asset Development Plan (ADP), which is reviewed every six months and is authorized by the Government Council for Economic Policy (KYSOIP).

HRADF’s philosophy is to act as a strategic partner for the Greek State to attract investments, enhance the Greek economy’s growth potential, strengthen its international credibility, and produce national wealth.

The Fund is a growth multiplier. Its mission is to maximize Hellenic Republic’s revenues by developing public assets and creating added value for the Greek economy, the people, investors, the local communities, the labor market, and the environment.



Objective Action

The creation of a structured evaluation system that essentially functions as a roadmap for the transition of every HRADF asset to sustainability, while also enabling easy monitoring of the progress of the sustainable performance of investments, before and after the implementation phase.

 

Target Audience

Use of the ‘HRADF ESG RATING TOOL’ concerns all companies in the HRADF portfolio that correspond to key sectors of the Greek economy, such as transport, energy, and tourism. The concessionaires of the above assets may also use it after the completion of the tender process and the signing of the relevant contract.   

 

Duration

In August 2019, HRADF submitted a proposal for obtaining technical support from the EBRD. Following a positive response and intensive collaboration between the parties, the digital tool was completed in June 2020. It has been used until now on an annual basis, with the option of re-evaluating at regular intervals decided upon by the user.   


Description

Recognising the response to the climate crisis as one of the greatest global challenges of the era, HRADF is systematically exploring ways to integrate the principles of sustainability and the adoption of ESG criteria into all of its operations, so that, beyond the economic and financial benefits it generates, the foundations of a more resilient and competitive economy can be laid, respecting the environment, creating quality jobs and a cohesive society, promoting innovation and strengthening the adoption of the principles of the Circular Economy. It is now clear that the success of enterprises is not just related to the quality of their products and services, but also to how they manage environmental, social, and corporate governance issues (ESG indicators). These indicators determine business conduct and reflect companies’ ability to create value and formulate effective long-term strategies, while also influencing the degree of enhancement of their social operating license, and that is why they are garnering increasing investor interest.  

Through individual efforts to incorporate the principles of sustainability into each project separately and to recognise key sustainability criteria for each asset category of the portfolio, we recognised the need to create a structured system for evaluating the HRADF portfolio. Thus, the HRADF sustainability team formulated and submitted the relevant proposal to the European Bank for Reconstruction and Development (EBRD), which financed the project in question. This is one of the few cases worldwide in which a Privatisation Fund is incorporating sustainability into its procedures, and this is the first time that a public organisation in Greece has developed its own digital ESG Rating Tool. It is based on international best practices and widely recognised standards, and is aligned with the sustainable development goals (SDGs) and the environmental and social performance requirements of major financial and investment institutions.   

https://hradf.com/psifiako-ergaleio-gia-tin-axiologisi-t/ 

According to the Finance Minister at the time, Mr Staikouras, who praised HRADF for this initiative, it could be adopted as a best practice by other public sector organisations.  

https://www.minfin.gr/web/guest/-/delose-tou-ypourgou-oikonomikon-k-chrestou-staikoura-gia-to-psephiako-ergaleio-axiologeses-tes-aeiphorikes-epidoses-tou-chartophylakiou-tou-taiped?inheritRedirect=true 


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Impact on Society

It is a tool that enables users to evaluate the current sustainability performance of the assets in the portfolio, to benchmark related asset classes against the entire portfolio, and to monitor performance over the long term. At the same time, it allows for recognition of the vulnerabilities of each asset through an evaluation report that is accompanied by high-level recommendations for ESG criteria performance improvement for use by HRADF and other interested parties.  

Furthermore, the ‘HRADF ESG RATING TOOL’ includes specialised indicators for specific asset categories, including ports, marinas, motorways, and airports, taking into account their specific characteristics and needs.  

This innovative initiative was presented at the International Conference on Sustainable Development (ICSD 2020), and was followed up by a relevant scientific publication:  

https://ic-sd.org/wp-content/uploads/2020/11/Riccardo-Lambiris.pdf 



Initiative Location

This digital tool enables remote evaluation and can be implemented anywhere  


Working with Organization

The ‘HRADF ESG RATING TOOL’ was completed with funding from and in partnership with the EBRD and Global Sustain. Think Plus implemented the digital customisation of the tool.   


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Workers Participation

The HRADF sustainability team worked closely and intensively on the development of the digital tool, together with the project teams of the participating organisations mentioned above. Successful evaluation of the portfolio, however, requires excellent cooperation with the companies being evaluated, and the feedback they provide during the process of collecting the required data – which is the basis for potential further improvements and enhancements – is vital.   


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Benefits for Οrganization

The inclusion of ESG criteria in the operation of HRADF offers multiple benefits for the organisation itself, and for the Greek economy and society in general, as it leads to: attracting sustainable investments to the country, ensuring the widest possible social acceptance of the projects, implementing resilient infrastructure that shields the country’s growth against climate change, contributing to the achievement of the goals of the European Green Deal and the UN’s 17 Global Sustainable Development Goals, which HRADF shares, in accordance with the recent amendment to its founding law.  

The incorporation of ESG criteria into port operations is of particular importance, given that ports are complex enterprises that include many different entities with a pronounced environmental footprint. The ‘HRADF ESG Rating tool’ can serve as the basis for shaping the roadmap for each port’s transition to sustainability, and it also provides easy identification of their vulnerabilities, for targeted performance improvement against ESG criteria. Its use could extend to the national level, providing the opportunity to draw up a national roadmap for the transition of Greece’s ports to sustainability, which is expected to be the key to Greece’s ‘Blue Growth’. 




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