Updated: Oct 4, 2022
This is the second of a series of 6 webinars brought to you by the ASEAN Climate Governance Network and the Sustainable Finance Institute Asia.
In this session, the panelists discussed how the climate agenda will affect the way businesses operate – the cost of capital, public perceptions, and the necessity of paradigm shifts.
Opening Remarks by the host Datin Seri Sunita Rajakumar, Chairperson of Climate Governance Malaysia. She talked about the formation of the ASEAN Climate Governance Network which was formed by the institutes of directors in the region who came together to volunteer to create a conversation on how to increase collective climate resilience.
She briefed on the first 2 sessions about how the climate agenda is going to affect businesses, PLCs & SMEs. A high level of dependency on the natural ecosystem was recognized and is inextricably interconnected with nature, not only relying on it for absolute human survival, but almost all activities are extractive from the environment. Many businesses are starting to demonstrate that they are valuing ecosystem services.
Industries are aligning with the direction of travel that society wants & needs. Exporting countries such as Malaysia & ASEAN are impoverishing countries when they extract from their environment & export to other countries. So there is tremendous momentum in the private sector to increase accountability.
In ASEAN, many directors and businesses are now recognizing they no longer have a choice but to demonstrate the sustainability of products and businesses to survive.
The moderator Dominic Scriven OBE, Chairman of Dragon Capital Group Limited moderated the panel discussion with:
1. Lit Ping Low, Partner - Climate & Sustainability, PWC Mainland China & Hong Kong , APAC Climate Lead. Her job is to advise businesses & governments in the Asia Pacific Region on climate change topics mentioned that Scientists, businesses & governments have been grappling with climate change issues for close to 3 decades.
From her observation, there are a few organizations, few businesses that are trying to tackle this issue in the early days when it has really come on stream in terms of the business action that has been in the last five years or so. Some of the recent initiatives, recent commitments that are made, whether it’s COP 26 or the previous few cops before that, there has been significant uplift of, especially large businesses committing to a number of initiatives, whether it’s from deforestation to meeting to phasing out coal. There have been a number of commitments.
Notably, these are from large businesses which bring in a little bit of today’s context of talking in the sort of small & medium enterprise. She touched on 3 main points on how the smaller & medium enterprises fit into this current wave of large business actions.
The first point is how SMEs interact with big businesses. Small businesses are the suppliers, the innovators & the customers of big businesses. When these large businesses take action, that will trickle the supply chain initiatives.
The second point is the extent of opportunities. PWC does a bit of tracking climate related start-ups & in the last 8 years, there have been more than 3 thousand companies that are in the category of climate start up. There are a lot of opportunities for innovators & start-ups which are typically smaller in nature but well placed to capitalize on the opportunity side.
The third angle, which is where many governments are coming in as well, is on how you transition. We all know that we need to transition to a low carbon economy, but how do we transition. We need a responsible transition. A plan that brings not just the big businesses along but also the people & the small & medium businesses.
2. Manjula Lee, Founder & CEO - World wide Generation and The G17Eco Platform said we need a concrete action that came from the largest oil company in the world & transitioned into the non-profit sector. We need proper capital markets to play a role. In her search for economic argument, she found that companies that were aligned to sustainability were outperforming the stock markets by 11 percent by just greening up & de-risking the supply chain and practicing good ethical business governance, they were making 14 times more revenue & profitability. Currently, data is gathered from the public domain mainly for public companies because they’re the only ones that do a sustainability report. While SMEs are still very far from understanding the importance of sustainability and climate change.
SMEs actually account for the global economy. However, there are no tools to help the SMEs and they’ve never been catered for. She concluded by highlighting 3 things, which were - No one can execute because no one gets access to the trust of comparable timely data and because of that no one can measure the impact on where to invest, where to divest, where to manage the risk and what’s actually working for scale.
3. Mr. Win Myo Thu who is an Environmental Activist started his session by introducing himself, who works for an NGO in Myanmar and is currently doing research at Oxford University.
He shared his current research, which is on climate change adaptation, where he focuses more on mitigation sites, especially when he looks at how SMEs can benefit from such a climate target.
Mr. Win has been leading a number of public campaigns in Myanmar. During the last 10 years, they have really mobilized people against the sustainable hydropower gem project and to stop a big coal fire power plant that is planned to be constructed in Myanmar. He stopped the bamboo implanter. His group prefers a green economy and environmental justice. He keeps on doing research and is observing how these small businesses get to be involved in sustainable economic development.
The session continued to discuss what kind of policies should be in place at the global and regional levels to encourage, incentivize & also to disincentivize climate change.