Impact of the economy on businesses discussed in BOV and Chamber of Commerce joint event

The importance of sustainability and putting more weight on ESG in business and operational models were the main themes that Bank of Valletta’s Chief Executive Officer, Kenneth Farrugia, addressed in a speech during a business seminar organised by the Chamber of Commerce in collaboration with BOV.

During the seminar titled The Maltese Economy: 2023 & Beyond, several key stakeholders discussed the current state of the Maltese economy and gave interesting insights on what is needed for our country to remain competitive in attracting foreign investment in the future.

ESG

“We notice two extremes when meeting clients: those who have strategically embraced ESG in their business models, whilst others have a very limited understanding of sustainable development goals and ESG ambitions," Farrugia said.

"Our collective contribution to economic growth should be driven by sustainable growth which in turn will strengthen the country’s value proposition making it more attractive for foreign direct investment which is so important for Malta and Gozo.”

He said that “it is frequently the case that we are driven by what is in it for me? This limitation needs to be extended to the important consideration of the way ESG will contribute to make Malta an attractive investment destination. We experience multiple arm chair critics that are completely devoid of constructive solutions. If we, the industry, want to sustain the growth of our economy we need to take charge of the required changes because it is easy to criticise but then we take a back seat when it matters most. Greenifying our economy is a journey that needs to be financed and incentivised, and all of us have a role to play in this paradigm shift which is so important for the country in its ambitions ot ensure sustainable growth. It’s not a coincidence that S is in the middle of ESG – because everything that we do ultimately revolves around our society."

Catalyst

The Bank’s CEO reaffirmed BOV’s position as a catalyst in the local economy.

“As Malta’s leading banking group, we aim to add value to society as we firmly believe that by adding value in this manner we will create value for the customers and our bank.  We commit to remaining supportive of the Maltese economy, and we want to be a catalyst in the business community to actively contribute and support the required changes," he said.

"Events like this are simulating discussions and providing interesting insights but these need to be followed up and events like this should not end up simply being talking shops. Otherwise we risk generating many useful suggestions that if not followed up will surely fizzle out. As a Bank we have identified those sectors we feel are behind the curve regarding ESG, and we will be supporting these sectors to embed ESG principles in their business models and operations.”

Positive economic growth

Malcolm Bray, senior manager in data insights and economics within BOV explained how during pre-pandemic years Malta’s economic growth was higher than in the euro area and such a pattern is forecast to continue even in 2023 and 2024.

He said that economic growth has tended to be job-rich, contributing to the significant increase in the share of foreign workers and to a pronounced expansion in the size of the population.

Nick Xuereb, The Malta Chamber Deputy President, highlighted the main pressure points that the labour market is experiencing, the impact of inflation and interest rates, the importance of tax reforms and the importance of pushing the boundaries.

“We are in a permacrisis state, and we must act diligently and in a timely manner to navigate and mitigate the challenges that lie ahead,” he said.