Six partner organisations of the World Business Council for Sustainable Development (WBCSD) have launched a new platform called ‘Action 2020 in Southeast Asia’ to push the sustainable business agenda in the region.
Announcing this on the closing day of the Responsible Business Forum on Sustainable Development on Wednesday, WBCSD chief executive Peter Bakker said that the Action2020 partnership is essential to green fast-growing Southeast Asia, where the number of middle-class households will double in the next decade and energy use is projected to triple.
The partnership will involve WBCSD’s six Asean business councils from Indonesia, Malaysia, Singapore, the Philippines, Thailand and Vietnam.
The group, whose members represent more than 200 firms in total, said it will work with governments, institutions and the Association of Southeast Asia Nations (Asean) secretariat.
They will rally firms in fields from renewable energy to shippping, to address issues such as climate change, pollution, transboundary haze, environmental degradation, social disparities, and food security.
The group has laid out specific science-based steps that businesses should take to achieve sustainability in these areas, as well as a timeline for what needs to get done by 2020, and what they want to accomplish in the longer term by 2050.
For example, at current rates of water consumption, the world will be short of 40 per cent of the water it needs in 2030, it said. Businesses should first assess their water risks across their supply chain, then develop a water strategy involving local action plans, and finally become stewards of water in their local communities, it recommends.
In a live video feed from WBCSD headquarters in Geneva, Bakker also urged greater innovation among the public and private sector. “We need to innovate business solutions,” he said. “We can’t create a more sustainable world by constantly telling ourselves it’s doom and gloom.”
Integrated reporting and transparency
Other speakers presenting at the forum stressed that if businesses are to become genuinely sustainable, sustainability must be treated as a mainstream part of doing business and integrated reporting is an important way to accomplish this.
Integrated reporting treats sustainability not as something separate from an existing financial report, but something that is examined and reported alongside financial performance, risks, and corporate governance, said Paul Druckman, chief executive of the International Integrated Reporting Council, which pioneered the concept.
Firms that carry out integrated reporting look at social capital (their relationships with the surrounding community), natural capital (their impact on natural resources), human capital (labour issues and employee retention) as well as financials.
Already, integrated reporting is embraced by many large firms and stock exchanges. The Johannesburg stock exchange, for example, makes it a requirement for companies seeking to be listed, said Druckman.
In 2012, Singapore’s DBS Bank was the first Southeast Asian firm to sign the Council’s integrated reporting framework. This year, the Singapore Stock Exchange made sustainability reporting mandatory for listed firms.
Integrated reporting, Druckman said, helps firms “build long-term trust with customers, investors, employees, and society to create a sustainable platform for the future”.
If we can get a critical mass of responsible companies demanding high standards of production, we can push the marketplace past a tipping point, and try and make sustainability a new normal for the future
Christopher Hails, WWF International network relations director
Toby Heaps, chief executive of investment advisors Corporate Knights Capital, spoke about a recent report by the firm, which compared how successfully major stock exchanges were able to get listed firms to disclose sustainability metrics such as employee turnover, energy use, greenhouse gas emissions, injury rates, payroll information, water consumption and waste management.
For there to be sufficient company sustainability data for investors to use, stock exchanges should make sustainability disclosure mandatory, Heaps said.
Such data would allow, for instance, investors to track environmentally friendly firms. One index it created, for example, which tracked low-carbon firms against the S&P 500 index found that the former group outperformed the latter by 7.8 per cent.
Other forum participants also recommended increasing business transparency. During the forum’s Young Leaders Dialogue, Singapore Environment Council certification executive, Ramanathan Thurairajoo, 32, urged businesses to “embrace higher levels of transparency in decision-making”, undertake environmental impact assessments, and consult the government, public and other stakeholders on environmental standards.
Levers for change
Representatives from the forum’s working groups, which discussed sustainability in building and urban infrastructure, shipping, financial services and other domains, also presented their collective recommendations.
Some areas, such as large-scale urban infrastructure planning or mandatory sustainability reporting, require regulators to lead the way, they said. For instance, Singapore mandates that all new buildings must be certified by Green Mark, a rating scheme administered by the country’s building and construction authority.
Tod Gimbel, managing director of public affairs firm Landmark Asia, also suggested that governments take the lead in procuring sustainable products.
They also agreed that addressing sustainability along the world’s major supply chains was an effective way of reforming the agriculture and consumer goods industries because a few firms exert a great deal of influence over the market.
In his closing address, WWF International network relations director Christopher Hails highlighted that just 500 firms control about 70 per cent of global trade in important commodities like palm oil and paper. For an NGO, pushing these to companies to change is easier than targeting 7 billion consumers or 2 billion raw material producers, he said.
“If we can get a critical mass of responsible companies demanding high standards of production, we can push the marketplace past a tipping point, and try and make sustainability a new normal for the future,” he added.
The annual Responsible Business Forum on Sustainable Development, organised by Singapore-based Global Initiatives and Eco-Business with other partners, was held at the Sands Expo and Convention Centre in Singapore.
It brought together industry leaders, NGOs and policymakers from the region to come up with recommendations and solutions for sustainable growth in sectors ranging from building and urban infrastructure to financial services.
Thanks for reading to the end of this story!
We would be grateful if you would consider joining as a member of The EB Circle. This helps to keep our stories and resources free for all, and it also supports independent journalism dedicated to sustainable development. It only costs as little as S$5 a month, and you would be helping to make a big difference.