SINGAPORE (Sept 23): Southeast Asia is lagging behind in sustainability efforts despite being most vulnerable to climate change, say experts at the BNP Paribas Sustainable Future Forum on Sept 18.
Rintaro Tamaki, president of the Japan Center for International Finance (JCIF), believes Asia still has far to go in terms of a region-wide, integrated environmental policy to tackle the threat of climate change. And this is despite the fact that it is facing numerous cross-border environmental issues.
JCIF is a public-purpose research institution in Tokyo, established by the Japanese financial community in 1983 following the Latin American debt crisis. It conducts macro-economic analysis of 60-plus economies. Tamaki tells The Edge Singapore that little attention is being paid to the use of fossil fuels and carbon emissions in the region.
For instance, he notes that Singapore is the first and only country in the region — as of now — to have introduced a carbon tax.
“Businesses are still sticking to ‘business as usual’. There are exceptions, but as a whole, they are sticking to their usual practices,” Tamaki says. “Many countries in the region are emerging economies, and they are seeking growth first, quality of life later. But these two should come at the same time.”
Indeed, research has shown that Southeast Asia is one of the most disaster-prone regions in the world, with more than 1,000 incidents — including flooding, earthquakes, volcanic activity, drought and wildfire — occurring between 1990 and 2016.
As the costs of renewable energy resources go down, Tamaki believes companies, even small and medium-sized enterprises, should not be hampered by what is perceived to be higher capital investment in sustainable practices. “In fact, smaller companies are more agile to put in place these practices, compared with bigger companies,” he says.
He stressed that intergovernmental collaboration much like the European Union is the best way forward for the region to implement region-wide, cohesive and standardised regulatory frameworks.
Nevertheless, Gabriel Wilson-Otto, head of stewardship for Asia-Pacific at BNP Paribas Asset Management, says there has been a lot of development across Asia-Pacific in environmental, social and governance (ESG) efforts, which have been very positive as a whole.
“If we look at ESG disclosure, regulations, revisions to corporate governance, and even China’s pivot towards addressing environmental issues by cutting down air pollution, [it] shows a lot of commitment and momentum in the region,” Wilson-Otto says. “So, the challenge from here is: How can we broaden the ecosystem of players in this region who are involved in the material issues?”
In any case, he says there are definitely steps to take to enhance integration and build a community of players that are actively working towards sustainability.
“In order to solve these problems, it’s not just a matter of a government-led solution; we need the industries and investors to get on board,” he stresses.
At the same time, Wilson-Otto notes that profit and philanthropy are not mutually exclusive binaries, and that focusing on one does not necessarily mean having to compromise on the other. “What I think people are increasingly realising — and climate change is an example of this — is that there is a very strong overlap between what sustainable practices are, and what making money or a resilient business looks like,” he says. “The increasing natural disasters, insurance liability claims, shifting weather patterns on crops, rising sea level are all issues that are becoming a financial reality. And the other side is the impact of changing consumer practices.
“If your consumer is asking for sustainable products, it only makes business sense to give your consumers what they want.”
