“Green business is a key instrument to support business development in a sustainable way”

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Solomon Pavliashvili, Deputy Minister of the Ministry of Environmental Protection and Agriculture of Georgia.

Q. What is the Ministry of Environmental Protection and Agriculture of Georgia role in promoting green business?

A. Green business is a key instrument to support business development in a sustainable way and encourages to balance economic growth with environmental protection. It supports us to contribute to the implementation of Sustainable Development Goals. The role of the Ministry of Environmental Protection and Agriculture of Georgia is to support and develop laws, policies and programs that promote green business. The Ministry supports the green business in different ways. Furthermore, it is very important to contribute to the   public awareness-raising and behavior change towards sustainability. We are implementing various projects in all these directions.  For example, as education is the initial and significant part of every process – the Environmental Information and Education Centre within the framework of EU4 Environment programme implements the online green economy course of the world’s leading educational platform – The One UN Climate Change Learning Partnership. There are also important forums held where the development of green economy and green business, promotion of small and medium-sized enterprises are discussed. In addition, in order to support green and circular business practices, legal provisions related to sustainable public procurement were elaborated as well. The draft decree of the Government of Georgia defines basic principles and means of implementing Sustainable Public Procurement in practice. Based on the requirements of the EU directives it includes the innovative concept of the life-cycle costing as well as the relevant calculator based on which the life-cycle costing can be measured. This concept can be considered as one of the effective instruments for the implementation of Sustainable Public Procurement. At the policy level, it is significant that with support of the Government of Sweden, we are working on the mapping of the circular economy in Georgia and we are planning to elaborate the circular economy strategy of Georgia as well. Number of projects are implemented in the country promoting green grants, eco-innovation, eco-labeling, energy-efficient and renewable energy technologies, etc. 

Q. What is the role of green business in the development of the country? Does it respond to the UN Sustainable Development Goals?

A. Role of green business is crucial for the development of the country. Of course, it responds to the UN SDGs and it is core to fulfill SDGs at the national level and to contribute its implementation at the international level. Modern approaches based on the developed countries’ practice show that for the achieving of economic growth there will be necessary a new type of activities, directed towards the greening of the economy. In the long run, introduction of green economy and development of green businesses will promote to the decline in spending of businesses, promote to the competitiveness, rising of employment and incomes, development of new directions in business activities, production of ecologically clean and green products, development of sustainable transport system and ecotourism, introduction of smart and resource efficient technologies. As a result, we will receive an improving business environment, market diversification, more jobs and improved economic indicators. Results of development of green businesses in the country, by all means will be reflected in the implementation of UN SDG’s.

Q. What are the main challenges you see in terms of green business development in Georgia?

A. The field of green business is indeed challenging in Georgia. Since it is a developing process, it faces challenges in achieving financial stability and implementing responsible business conduct standards and practices. These challenges are usually related to increased competition, financial problems, incorrectly formed business models, product creation without preliminary market research and analysis, errors in planning marketing strategies, incorrectly selected partners, lack of investment and competencies in research and development, lack of appropriate infrastructure for innovation, increased costs for creating innovative products, etc.

The analysis of the different activities, programmes and projects dedicated to sustainable, inclusive and green development has revealed the necessity of awareness raising measures among business circles and especially SMEs, with regard to green economy opportunities and benefits from it. Therefore, we are implementing and supporting environmental education and awareness raising programmes at the national level targeted to various audiences. The lack of special financing, dedicated to the implementation of green business related projects, is a second main challenge for the development of green business in the country. The financial system has a key role to play here, as there is no sustainable development without sustainable financing, be it public or private.

Furthermore, another issue for the measurement and assessment of overall profit by business enterprises following the application of greener approach, rather than a traditional business model in a long-term perspective. Increasing the price for products and services can also be another issue of concern. It is equally important both for ensuring the implementation of environmental legislation and for providing incentives for the business to introduce green growth practices. Another issue is the lack of experience and capacity of the private sector.

Q. What legislative changes were made in 2021-2022 that contributed to the development of green business?

A. Development of the legislation and policy promoting green business practices is among the priority of the Government of Georgia. Despite the difficult situation related to Covid-19 pandemic, we are trying to approximate our legislation in regard to green development, to the best international practice. Therefore, Forest Code, the law on Energy Efficiency, Law on Energy Efficiency of Buildings, Law on Ambient Air, regulations of Extended Producer Responsibility have been adopted during the outbreak of Covid-19, have been adopted during the recent years. In the framework of the EU-funded EU4 Environment Programme, in close cooperation with the State Procurement Agency of Georgia and Environmental Information and Education Centre, Georgia drafted sustainability provisions and relevant articles to the draft Law of Georgia on Public Procurement. Furthermore, a draft decree of the Government of Georgia  “On the Necessary Measures to Be Taken in Order to Achieve the Goal of Sustainable Development in Public Procurement” was prepared in the framework of the project. Draft decree regulates detailed provisions and approaches for the practical implementation of Sustainable Public Procurement and reflects requirements of the EU directives and international best practices.

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Q. What role does public-private partnership play in the development of green business? – Can you underline some projects in this direction if we have?

A. Public-private dialogues play a significant role in the process of green and circular transition as the participation of the business operators makes the process more transparent and democratic. It contributed to preventing conflict among different groups and between the public and the government and it increases confidence in public institutions. Public-private discussions contribute to creating fair policies/laws reflective of real needs enriched with additional experience and expertise of the private sector; It facilitates cross-sector dialogue and adopts more forward and outward-looking solutions. For the effective management of such important and large-scale processes, it is crucial for the public and private sectors to work together. For these reasons a number of training, consultation workshops and dialogues have been conducted in the framework of various international projects. 

For instance, in the framework of the EU-funded EU4Environment programme, awareness raising activities and trainings have been conducted for the Georgian economic operators, business associations, manufacturers and  distributors in 2022. As the Sustainable Public Procurement is a new concept for Georgian legislation and practices, awareness of business and market players was essential for high-level competition on the market. 

Municipal waste management sector is connected to public-private partnership as well. We have an example of this cooperation in one of the municipalities of Georgia, namely Sagarejo where the collection and transportation of municipal waste is implemented by the private sector.   

Public-private partnership plays an important role in the implementation of extended producer responsibility (EPR) too. Within the new reform launched in Georgia to support establishment of the Extended Producer Responsibility system at the national level, producers and Producer Responsibility Organizations will work closely to manage the specific waste streams. As long as the municipalities have their obligations on waste collection, they will have to work together to organize separate collection sites.

Q. Do you think that existing law is effective in terms of protecting Georgia from environmental offenders?

A. It should be mentioned that, on March 2, 2021 the Parliament of Georgia adopted Law of Georgia on Environmental Liability, which is fully in line with the obligations under the EU-Georgia Association Agreement and respective EU directive, aiming to develop a system of environmental liability based on “polluter pays principle” and serving the elimination/mitigation of environmental harm. The law established a completely new mechanism of environmental liability in Georgia, according to which a person causing significant damage to the environment will be obliged not to pay the monetary compensation, but to take necessary remedial measures to restore the environment in accordance with a predefined plan-schedule. The new law also envisages the operator to take preventive actions, when there is an imminent threat of such damage occurring. Moreover, the new legislation introduced the financial guarantee to manage environmental risks. Namely all the operators carrying out the high-risk environmental activities will be obliged to have a financial guarantee before launching the activity. 

It is important to have legislation to regulate the environmental offenders though the most significant is to its appropriate implementation. The Ministry is doing its best to support relevant enforcement of the green legislation.

Q. Can you evaluate the overall green businesssituation in Georgia?

A. The state of green business in Georgia is still in an active phase of development. More precisely, as mentioned above, it faces challenges, both economic and technological, as well as in terms of lack of experience. Since there are many novelties and innovations in this field, it is necessary to adapt to all this, change the traditional methods, which step by step will definitely lead us to the set goal of creating the most comfortable environment for the green business development in the country.

We actively work on the development of a circular economy in the country. In this regard, we are committed to support waste prevention, reuse, recycling, and energy recovery according to the environmentally sound management standards and safe disposal of waste. In order to implement Extended Producer Responsibility, we developed six by-laws on the number of waste streams. Four by-laws have already been adopted by the Government of Georgia. Apart from that, the Ministry of Environmental Protection and Agriculture of Georgia with the support of the Kingdom of Sweden is intending to develop a National Strategy for Circular Economy with the aim to ensure long-term resilience, promote economic opportunities and gain environmental and social benefits.

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Q. What kind of restrictions do companies have in order not to harm the environment and to contribute to the care of the environment?

A. First of all, it should be highlighted that sanctions established for administrative offences in the area of environmental protection and natural resources management, are subject to periodic review, as a result of which relevant amendments to the legislation are being developed and initiated to ensure that administrative penalties have a deterrent effect.

In order to reduce air pollution from the industrial sector in the country a legislative package was adopted in March 2021 that tightened liability of industrial plants for exceeding emission limit values and absence of abatement equipment. It introduced obligatory conditions for industrial plants having a significant negative impact on the environment to install automatic self-monitoring systems for emissions into the air.

Sanctions for violation of fuel quality standards (for import, production and provision of lack of quality petrol and diesel) increased sharply in 2020 and it became the subject to the Criminal Code of Georgia if violation is committed repeatedly.

In this regard, it is particularly noteworthy that implementation of the Extended Producer Responsibility (EPR) system at the national level is one of the requirements provided by the Waste Management Code. To ensure the implementation of extended producer responsibility, the National Waste Management Strategy and Action Plan defines strategic goals and specific actions for the management of the following types of waste: batteries, oils, packaging materials, electrical and electronic devices, tires, accumulators, end-of-life vehicles. Hence, all companies considered by law are obliged to fulfill their duties. This and other restrictions which companies have, are important to lead their businesses to the greener operation.

Q. What does the Ministry of Environmental Protection and Agriculture in Georgia do in order to improve the environment and reduce pollution? What are the main projects that you have implemented in this direction?

A. The Ministry develops a National Environmental Action Programme (NEAP) once every five years, where the activities to be implemented during this period are described in details. The programme outlines Georgia’s environmental priorities and defines strategic long-term goals, including specific actions that are determined to improve the quality of the environment and reduce pollution.

The important activity in terms of strengthening environmental protection is the improvement of the environmental monitoring system, which is an important tool for determining the state of different components of the environment, measuring the quality of pollution. Improvement of  these types of systems allow for better identification of environmental conditions and planning of appropriate responses.

There are number of completed projects implemented in this directions, for example: “Adaptation of Remote Sensing Methods for Water Resources Management and Assessment of Extreme Hydro-Meteorological Situations in Georgia” (donor organization – The Slovak Agency for International Development Cooperation – SlovakAid), “The pilot project of the state programme for the inventory of windbreak (field protection) strips in the municipality of Telavi”, “Review and update of the national action plan for compliance with the Stockholm Convention on Persistent Organic Pollutants (POPs) in Georgia” (Donor organizations – Global Environment Facility (GEF), United Nations Environment Programme (UNEP)), “Improving Environmental Monitoring in the Black Sea” (Donor organizations – European Union (EU – DG DEVCO) and United Nations Development Programme (UNDP)), etc.

Q. What are your future plans in terms of promoting green business?

A. The Ministry has plans to encourage their activities  in terms of promoting green business. For instance, information settings, consultations and various tools ensuring public access to environmental information, involving government agencies and the business sector are important to continue in order to identify more environmental initiatives and receive support from the government.

The Government of Georgia recognizes the green economy opportunities for the country and its potential for sustainable economic growth, job creation and poverty reduction. Green economy is an important part of the process that will help to deliver sustainable development through focusing on the role of natural capital as a driver of economic growth.

Within the scope of the different programmes, with participation of our international partner organizations, we are organizing workshops, seminars, trainings and conferences for business representatives. These activities are dedicated to: resource efficient and clean production (RECP), green economy and new growth opportunities, eco-innovation, sustainable public procurement, ecological value-chain and product innovation, environmental management systems and perspectives of green finances in Georgia.

I think that the main trend of the issues under the different programmes dedicated to the development of the green economy should be preserved. At the same time, since the main beneficiaries of green actions are representatives of the private sector, the programme should ensure participation of more companies and especially SME’s from the different spheres of activities. 

From our point of view, for the preservation of sustainability of the programmes we need implementation of much more projects dedicated to resource efficiency, product innovation, green economy and similar areas. Visualization of green actions will be a good incentive for the private sector to do the same action in their companies.

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