Introducing: Gecic Law’s ESG Practice

CEELM: What was the rationale behind your decision to launch the ESG practice?

Gecic: The transition to a stand-alone ESG practice was quite natural for us as it is a perfect fit for several of our core competencies. We combined our unparalleled expertise on the latest developments in EU law, such as the European Green Deal, with our know-how in trade policy, finance, environment, and labor to provide support in all aspects of this broad and diverse field. EU law is still the uncontested rule of the land in Europe, for both doing business applicable to the internal market and international trade in the case of Western Balkans. As ESG rose to the top of the agenda, we realized that we could offer comprehensive solutions and significant value in this area. We are proud to be the first independent law firm in the region to provide this service in a field that is already so important and will very soon become vital to all businesses. The naked truth is that businesses can no longer afford to remain oblivious to ESG standards. Stakeholders are no longer willing to accept corporate behavior which does not adhere to standards in these areas. This impacts enterprises in the Western Balkans even more than they realize. For companies that are not mindful of these areas, it will become increasingly more difficult to borrow money from creditors, attract investors, sell goods to customers, be competitive in exports, and attract the best employees, as they are all becoming more and more interested in their ESG standing and are acting on it. Therefore, this will undoubtedly affect their success in the market and their financial results.

Colic: Adding to Bogdan’s remarks, for a long time now, we have been addressing the various aspects of ESG partially, while understanding that the issues are so interconnected that fixing one area at a time does not solve the entire problem. Indeed, businesses often emphasize the importance of, for example, carbon neutrality, and neglect other important areas, especially corporate governance. We believe that the most beneficial way is to holistically approach the issue, treating all sides of the matter. By launching our ESG practice, we aim to address the totality of our clients’ needs in this increasingly important area. This is where we see the emerging opportunity and our competitive advantage.

CEELM: What were the recurring questions you’d be getting from clients that initially sparked the thought of setting up a dedicated practice?

Colic: Our clients are mostly well-informed that there are changes they will have to face as the EU accession process moves on. However, they are not always abreast with all changes that may affect their operations and the dynamics of this impact. Their main concern is how these processes may affect the vitality of their business and their bottom line. This is where we step in and start preparing our clients by first assessing and analyzing the risks they may be exposed to and then advising on how to best adapt, from a regulatory, strategic, financial, and operational standpoint. In the implementation, we prioritize between the must-have and the nice-to-have but we do provide a clear roadmap for each area. We aim to look at the big picture, but in practice, in most cases, we must often work gradually, always with an eye on the fundamentals of each business.

CEELM: How different are those implementations from company to company?

Gecic: Each business has a story of its own. So, the answers to the same questions can often be very different. We aim to provide solutions that are tailored to the specific needs and circumstances of each client. That is why, as Ognjen mentioned earlier, it is essential to go through a rigorous due diligence process together with the client to pinpoint the areas which require attention. Some businesses must undergo a fundamental transformation, while others are well ahead of the game. As advisors, we take pride in making sure we understand the core of our clients’ businesses very well and take a complete approach to the issues at hand. We strongly believe that companies should also look at ESG as an opportunity to improve their businesses in a meaningful way for the long term. They will benefit from incorporating ESG standards in their strategies and throughout their operations, not only as a quick fix but as a genuinely new way of thinking. Many businesses are still held back by a short-term approach, seeing change as an additional cost, avoiding and postponing action. Some still do not understand that failing to prepare may significantly affect their ability to compete in the market, sell their products, and have access to financing, which may spell the beginning of the end for them. As a business in our own right, we are thrilled to be part of this process, as we also take on board ESG standards. Wouldn’t it be completely inauthentic if we did not adhere to what we preach?

CEELM: The ESG practice will be co-headed by Colic and Kosec. Why did this pairing make sense?

Gecic: We cannot say enough about the importance of understanding our clients’ businesses thoroughly, especially in ESG. This conviction, along with an innovative and solution-oriented approach in everything we do, is the essence of the value we provide. To look at ESG from a purely legal standpoint would just not suffice. Demonstrating this commitment, we activated our top senior talent, both with a strong corporate legal and operational business background, to head our new practice area.

Colic: I think it is wonderful that we’ve adopted this approach. Although it’s so obvious, it is still quite rare in our region and clients truly appreciate our dedication to their business needs. We make a point of including this approach in our work with clients, at every stage of our relationship, and we feel this is our unique proposition in the market. Legal advice needs to take into account wider implications on the business itself.

CEELM: And what’s the composition of the rest of the team and how is it structured?

Colic: The team comprises seasoned experts in various fields. Our experience and knowledge in EU law are unrivaled and very well known in the market and play a significant part in our new ESG practice. Through the years we have also amassed a depth of expertise in the field of energy, working on some of the most groundbreaking projects in the Western Balkans, both in conventional and renewable energy. Our environmental practice also went from strength to strength as the business world moves towards the goals of net-zero emissions, enhanced recycling practices, and improved waste management. Meanwhile, our corporate practice has tackled many fundamental issues, ranging from labor practices and anti-discriminatory policies to achieving more transparency in corporate governance. So, our team, supported by our business arm which leads our CSR efforts and human capital policies, is a unique force to be reckoned with in our region.

CEELM: How do you see the ESG practice developing? What do you expect will be the drivers behind its growth?

Gecic: The opportunities are immense. The time will come when everyone will either be a part of the problem or the solution. We often hear that businesses in our region have more pressing concerns now, but I will say it again: if they fail to prepare, they may become obsolete soon. Regulators, investors, creditors, customers, and other key stakeholders will insist on responsible business conduct. The increasingly mandatory EU rules on ESG will define international trade in the years to come, impacting exporters and entire supply chains in the Western Balkans and beyond. Everyone and everything is connected, meaning that one non-complier can cause disruption. Running a business outside an EU member state won’t be enough to avoid EU rules and regulations on responsible business policies. To survive in the global economy, businesses need to see ESG as a must.

CEELM: Do you expect more firms to announce similar practices in the market? If yes, what do you believe will make yours stand out over others?

Gecic: We have already seen movement in this area and given the high demand for ESG services, we are not surprised. We are confident in our unique approach which has always been business-oriented, multidisciplinary, and focused on the latest trends in EU law. We believe that our drive for innovation, our strategic method, and our dedication to impeccable client service will be key differentiators for our firm in this and other areas. We are one of the fastest-growing firms in the region. However, we strive to always remain sharp, flexible, and responsive to the needs of our clients. We have an amazing team of seasoned professionals with a can-do attitude which excels at anything we do.

This Article was originally published in Issue 8.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.