FDI Post-COVID-19

ESG (Environmental, Social and Governance) criteria are used by socially-conscious investors and shareholders to screen investments and assess a company’s impact on the world. When setting up the European Business Association in Georgia in 2017, the founders were acutely aware that Georgia was at an inflection point in its development. Debates about a European trajectory had by then been decided conclusively by the signing of the DCFTA and introduction of the visa-free regime. More importantly, the often accepted scorn of some older businesses and commentators for European standards was under question in both the market place and in wider society. A forward-looking generation of new businesses and entrepreneurs were coming of age.

The EBA had an ethics policy from inception and it was much more than a document filed on a shelf, (https://www.eba.ge/en/code_of_conduct). The policy excludes membership from cigarette companies, companies with no safety standards and companies with no environmental policies. In a post-COVID-19 World, the "New Normal" will make ESG criteria more and not less important. The coronavirus pandemic has stress-tested every sector and issues such as good-governance will in future be essential for all serious companies looking for foreign investment and will be subject to intense scrutiny. International and institutional investors are going to look very carefully at companies and locations as they seek to protect investments from future shocks and prepare for a more diversified global ecosystem with less reliance on China.

Of course, no-one can forecast with certainty where the World economy is heading over the next 12 months and more shocks can be expected, but it is already clear that in the eyes of the World, Georgia has performed well: In the main part because it demonstrated good-governance.

This creates a new attribute for the Georgian Brand - a safe environment in a safe pair of hands - and we would do well to capitalise on this marketing advantage as we seek new foreign investors and manage existing investments. You may think it is perhaps too early to be writing about the way ahead, but we have been planning a European future with strong ECG since the launch of EBA and our vision "Doing business in Georgia will be the same as doing business in Europe" becomes closer to reality every day. COVID-19 will accelerate this momentum.

A transparent company in a communist state is a contradiction in terms and we already see tectonic changes in the supply chains and investment flows around the World. These will not simply reset to 2019 and start again as is nothing has happened!

Such changes are of a once in a generation nature and we would do well to understand that this will play to Georgia's economic advantage if enough companies embrace the change, its potential and our unique starting point. Georgia is a young country in economic terms and can continue to strive for and demonstrate best practice, building stong company brands within a strong country brand. This is my personal opinion but I am not alone. Over 100 companies are moving forward together in this director as members of the European Business Association Georgia. Potential foreign investors are watching us and FDI is the prize. He who dares, wins!