Why Israeli companies need to prioritize sustainability for global investors - opinion

• Published date: 06 April 2024
• Author: ERAN RAZ
• Publication title: Jerusalem Post, The: Web Edition Articles (Israel)

Considering this, the obvious question arises: How does this legislation impact Israeli companies

Many Israeli companies are SEC public and have already begun preparations to align their operations with the regulation. Other Israeli companies, including private and public, although not directly affected by this regulation, have started to assess the integration of ESG considerations into their strategies and operations.

For the first time, PwC Israel surveyed organizations across various sectors in the country, and among the main findings is that while most organizations are involved in sustainability projects (74%), ESG considerations have limited influence on decision-making processes in over two-thirds of the surveyed companies. Also, roughly half of the organizations surveyed have established ESG goals, with reducing greenhouse gas emissions as a primary focus.

However, many organizations still lack a complete understanding of the significance of ESG. And one of the insights is that public companies show greater engagement in promoting ESG goals (66%) compared to private companies (34%). These findings emphasize the ongoing challenge of fully embedding ESG principles into the business practices of Israeli companies.

Israeli companies should embrace ESG

Israel has yet to embrace extensive legislation similar to the US climate law and the European regulation (CSRD), which currently mandates limited disclosures for listed companies concerning risk management, including environmental risks. Despite this delay in ESG awareness, global investors increasingly focus on ESG-related factors. Therefore, it's essential for Israeli companies to proactively prepare for this shift in purpose to remain relevant in investing while navigating the ESG landscape.

It is crucial to take operative steps to make this discourse more tangible in Israel and to embark on a journey through the worlds of investments and ESG. The first step will be integrating ESG within a business strategy.

Leaders must question the long-term ESG risks and opportunities, prioritizing the integration of profit and purpose. They must reassess the dangers conventional models pose and explore opportunities for...