The Asian Development Bank (ADB) this week hosted its inaugural Green Business Forum for Asia and the Pacific, which features high-level talks and panel discussions on sustainable business opportunities in the region.
The forum was held at the ADB Headquarters in Manila from November 22 to 24 amid the need to address Asia’s own socio-economic and environmental challenges - such as climate change, population growth, dwindling natural resources, land degradation and water and air pollution - through sustainability in the region’s economic development.
According to ADB, Asia is home to 60 per cent of the world’s current population which are fast migrating from rural areas to overpopulated urban centers. The region comprises nearly 40 per cent of global output and contributes 60 per cent to global growth.
This raises the need for building resilience through sustainable business growth.
Global as well as regional experts and frontliners from government, the private sector, and academia in areas like green financing, technology and sustainability brought to the table principles and best practices in sustainable business that can be applied to spur green growth in the region, specifically in the areas of agriculture, eco-tourism and services.
On the first day of the forum, answers to some of the common barriers to sustainable business were raised. These included how to have an enabling policy and regulatory framework in place to support sustainable business, how to create a strong and consistent market for environmental goods and services, how to access funding, how to use technological innovations in green business set-ups and most importantly, how to make money while going green.
ADB president Takehiko Nakao said at the opening plenary: “We’ve had so many forums like sustainable transport, water management and clean energy, and also how cities can be cleaner. But in a sense this forum is focusing on the profitability of doing all these things and I think there is great potential.”
UNEP executive director Erik Solheim, who joined Nakao in the panel, said Asia will take a driving seat in spurring sustainable business in the world.
“In a few years Asia will lead, and at the core of that is China,” Solheim said. “The most important issue is the issue of mindset. People see the environment as a cost instead of an enormous business opportunity.”
Other speakers at the opening plenary were Dr Madhu Khanna from the Department of Agricultural and Consumer Economics in Urbana, Illinois, Bangladesh Environment and Forestry Minister Anwar Hossain Manju, Philippines Department of Environment and Natural Resources secretary Regina Lopez, and Daniel Spitzer from the Bhutan-based Mountain Hazelnuts Group.
Perhaps the very important focus of this forum is that green can make money. It is about profit.
Takehiko Nakao, president, Asian Development Bank
‘Green can make money’
To help establish a strong sustainable business sector in the region, Nakao expressed ADB’s commitment to lend funding to more public and private sector groups that are pursuing green growth initiatives.
He highlighted that in the Philippines, ADB issued green bonds which financed private sector geo-thermal power plant projects while in China, ADB funded initiatives to address the imminent issues of water, soil and air pollution. Nakao said these issues have to be addressed seriously to avoid causing social instability in countries.
“Perhaps the very important focus of this forum is that green can make money. It is about profit.” Nakao said. “The market is ready for environmentally-sustainable food and products. Consumers are ready to pay a little bit more.”
He added: “Fifty years ago, when we started ADB, the main agenda was how to feed people. But today it is about climate change and environmental sustainability. It’s not because of COP21. It’s not about the Sustainable Development Goals. Asian countries want this. People want this. And ADB is reacting to that.”
‘Name and fame’
Underscoring that there is a strong business case for green products and services in Asia, the forum discussion moved to identify enabling policies and regulatory frameworks that must be in place to ensure that green businesses thrive.
Dr Khanna said that in order for existing businesses to be motivated to adopt sustainability, there has to be a policy push from the government, and that governments may mandate businesses to go green but without being punitive.
Government policies will ensure there will be a long-term demand for environment goods and services, Dr Khanna said.
For example, in the aviation industry, the push from Europe to impose carbon tax on flights based on the airlines’ fuel consumption is leading the aviation industry to shift towards renewable fuels, she explained.
“The combination of technical expertise [from universities] as well as the policy push is what creates the demand for these technologies,” Dr Khanna said.
She added that market-driven incentives that have been created by civil society also lead to a demand for green business, making them profitable.
“We’re seeing a shift to that now. China is a leading country in terms of ISO certifications in most recent years and far surpassed the rest of the countries. Why is China’s companies doing that? It’s a way for them to gain access to European and western markets,” she said.
For his part, Solheim said that international forums and financing facilities such as the G20 and the recently-launched Tropical Landscapes Finance Facility in Jakarta will also help drive sustainable business.
“We’re now going into green finance through the G20, which is the most powerful vehicle for regulating markets. China leads in the green finance at the front and centre. Germany is continuing. They want financial disclosure. Which means that companies should disclose their bank assets in an environment and not just in a financial way.”
Solheim added that if a company had caused abuses to the environment, then it must be disclosed.
“On the positive note, if you have green [investments] in your portfolio, that should be made open to everyone so that we could name and fame your business.” he added.
Both Nakao and Solheim concurred that governments have enormous impacts on the sustainable business market by the way they allocate budgets to support green growth, enforce compliance, and incentivise the public for buying green. This will create the economic and social pressures conducive to promoting sustainable business.
The second day of plenary discussions featured talks on how diffusing green technology would support business innovation and what are profitable business opportunities that sustainably utilise the rich and diverse natural capital in the region.
To view tweets of discussions and commentaries from the forum, visit #GreenBizAsia.