Side-step short-termism by embracing sustainability

Singapore Business News speaks to Forum for the Future’s Asia Pacific executive director Stephanie Draper about the organisation’s new presence in Asia and their plans to help companies embed sustainability practices in their business strategies.

Many businesses today risk suffering from “short-termism” as they chase quarterly earnings and annual budget targets, often causing them to lose sight of long-term threats. But to ensure the longevity of their business, companies will have to start facing challenges such as climate change and resource scarcity now, says Stephanie Draper, deputy chief executive and Asia Pacific executive director of global sustainability non-profit Forum for the Future.

Headquartered in London since its founding in 1996, Forum works with organisations and governments worldwide to help them incorporate sustainability into their operations. Their work is characterised by a future-oriented outlook, which employs methodologies such as scenario planning (in which several plausible realities in the future are presented and analysed), and examines processes at the scale of large systems, such as industry sectors, cities, or countries.

Draper, who oversees Forum’s work in the region, adds that Asian companies are poised to emerge as global sustainability leaders by moving quickly to weave sustainability concerns into their corporate strategies.

Since the organisation set up its Asia Pacific headquarters in Singapore last November with a staff of four, it has worked with companies in Singapore, Hong Kong, and Malaysia to integrate sustainability into their business operations. There are also plans in the pipeline to launch a new online platform called ‘Futures Centre’, which will be a virtual repository of information on future trends and sustainability issues.

Speaking to Singapore Business News, Draper elaborates on Asia’s potential to be the most prosperous yet most sustainable region in the world and how tools such as futures and scenario planning can help companies and governments here achieve this vision.

Why did Forum for the Future decide to come to Singapore, and what has the experience been like?  

The Asia Pacific region is the growth engine of the global economy right now, and there is a big opportunity to incorporate responses to social and environmental challenges as part of that journey. Our ambition is to create a sustainable future, but we recognise that climate change, water stress, and inequality are not just national problems. These are global challenges, so it was really critical that we were international.

Some governments in the region are already implementing sustainable and smart policies in this space. Singapore’s vehicle quota system (which limits the number of new vehicles that can be registered) and South Korea’s drive to commit two percent of its gross domestic product (GDP) to developing a green economy are two such examples. These trends show a big opportunity for green growth in this region, and we felt that we have something significant to contribute to that.

The journey so far has been smooth. We have been doing strategic work with leading companies in the region, such as the China Navigation Company, Swire Pacific Offshore, Sime Darby, and Hongkong and Shanghai Hotels Group.

We plan to bring our best thinking to Singapore and have been working on setting up the Futures Centre, which is a virtual centre that will collect and curate information on future trends on an online platform. This platform aims to help businesses, policymakers and non-government organisations understand the long-term implications of their actions and apply these trends strategically.

These projects have kick-started a successful first year, and the support we have received from the Singapore Economic Development Board has been helpful too.

How can Forum for the Future’s methodology of futures analysis, scenario planning and system innovation help businesses weather challenges such as climate change and resource scarcity while remaining profitable?

Futures work refers to identifying trends that will affect a business in the future through research and interviews with experts, and mapping out a set of plausible scenarios that could unfold as a result. Companies can then explore whether a particular strategy will be successful or pose a risk in a given scenario, and be better prepared to respond to different outcomes.

Sometimes, a group of companies from the same sector can also identify the most favourable scenario for the industry and collectively devise strategies towards achieving that.

This futures process is the beginning of taking a more systems-based approach, which is at the heart of Forum’s work. ‘Systems innovation’ is a set of actions that bring about a shift in an industry sector, economy, or city – a system, essentially.

This approach is important because the challenges that we face as an economy today – resource scarcity, developing renewable energy sources and adapting to climate change – are complex and intertwined.

These challenges cannot be solved one at a time, nor by a single organisation. Forum for the Future facilitates systems innovation by bringing cross-sector players together so that businesses, governments, and NGOs are all collaborating to address these complex issues.

Can you share some examples of how these approaches have benefitted companies?

The fast pace of the Asian economy represents a big opportunity for Forum, because companies here are quicker to respond and change their business practices once they see the strategic value of sustainability practices.

In Singapore, we worked with merchant shipping firm China Navigation Company to incorporate future trends into their business strategy. We worked with 30 of their senior managers to develop a set of scenarios which influences their core business strategy, investment decisions, human resources policies, and how they engage various stakeholders.

We also worked with Sony Europe, for example, to explore how Sony’s products and services would need to adapt to a set of possible future scenarios. Out of that exercise, Sony began exploring the idea of setting up an ‘Internet of Things Academy’, which will enable people to access and use the immense amounts of data coming out of interconnected machines to track things such as air pollution.

Sony also began exploring the idea of creating mobile phones made up of modular components, which can be replaced as they wear out, rather than replacing the whole phone every few years. It is a challenging idea, but Sony is in the process of working through a business model with mobile phone providers in the UK.

What are the opportunities and challenges in working with Asian companies to embed sustainability into their corporate strategy and business practices?

The fast pace of the Asian economy represents a big opportunity for Forum, because companies here are quicker to respond and change their business practices once they see the strategic value of sustainability practices.

A lot of companies in the region also operate on a conglomerate model, where one group owns several different companies. This helps to facilitate change across a range of businesses and enables different businesses to learn from each other.

For example, the Swire group in Hong Kong aims to have net zero environmental impact, which involves reducing their greenhouse gas emissions, water usage and waste generation, and making a positive contribution to society.  With companies as diverse as Cathay Pacific the airline and Finlays, an agricultural business, there are opportunities to learn from each other, balance the challenges in one company with the opportunities in another and look at getting to Net Zero across the Group.

Asia is also home to many family businesses that are more inclined to think about their long-term legacy. This presents an opportunity to drive long-term thinking and sustainable business.

What is the most exciting aspect of Forum’s plans in Asia?

I am really excited about the upcoming Futures Centre which will be launched in February next year, and our ability to use that platform to drive long-term thinking in the Asia Pacific region. There is a great deal of energy and innovation that already exists in Asia, and I am eager to continue to harness that to help achieve smarter, greener cities, and reduced inequality.

Asia also faces numerous challenges that can be solved with a more collaborative approach. In Indonesia, for example, 75 percent of residents do not have bank accounts. The region has lost 13 percent of its forests in the last 20 years, and there are about 2.5 billion ‘aspirational’ consumers with increased purchasing power, the bulk of whom are from the Asian region.

These challenges, combined with Asia’s vulnerability to climate change, pose difficulties, but there is also a massive opportunity for green growth. If we can apply innovation and collaboration to these issues, then Asia Pacific will be the most prosperous, and also the most sustainable region in the world.

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