As the fight against climate change becomes a key priority for governments and people around the world, businesses are heeding the call by placing Environmental, Social and Governance (ESG) factors at the top of their agendas. Many countries are working towards the ambitious goal of keeping global temperatures from increasing by more than 1.5 degrees Celsius above pre-industrial levels by achieving net zero emissions by 2050.
However, the task of achieving this target remains elusive, with a recent United Nations report warning that the current climate plans from governments worldwide are insufficient to limit rising temperatures. Against this grim backdrop, a rising number of companies globally are stepping up their ESG efforts to help their governments meet these targets. Investors are also reassessing their portfolios and channeling more funds toward responsible companies that operate sustainably and with clear ESG metrics.
Addressing the problem at its source, energy companies and product manufacturers are taking significant steps to reduce the environmental impact of their operations, both by embracing circular economy models and by harnessing renewable energy solutions such as solar, wind and hydrogen.
One such energy company is Malaysia’s PETRONAS, which has responded to this need for change while continuing to provide a reliable supply of energy. PETRONAS has been actively working to reduce greenhouse gas (GHG) emissions from its hydrocarbon resources, as part of its efforts to achieve net zero carbon emissions by 2050.
The company’s path to net zero supports Malaysia’s own ambitions to help limit the rise in average global temperature to well below 2 degrees Celsius. Malaysia ratified the Paris Agreement in 2016 that deals with GHG emissions and climate mitigation. As such, PETRONAS has taken progressive steps to decarbonize its operations by undertaking and consolidating climate action activities across the group.
Real estate companies are also changing the way they do business by placing sustainability at the core of new developments, ensuring that water and energy waste are minimized while implementing eco-friendly initiatives designed to bring residents closer to nature.
Central Pattana, the property arm of Thai conglomerate Central Group, is pursuing sustainable outcomes through a variety of means, including the use of solar cell and automation systems at all its developments, and installing over 400 electric vehicle (EV) charging stations at Central shopping centers in 2022. The company is also ramping up the use of sustainability-based designs at its projects.
Collectively, these efforts will help Central Pattana elevate the quality of life of people, the communities they live in, and ultimately the planet, while striving simultaneously to become Thailand’s first mixed-use developer to reach net zero emissions by 2050.
Central Pattana’s sister company, Central Retail, is leading the charge for environmentally aware retail practices that reduce waste, cut carbon-based fuel use, and enrich the quality of life across communities. The company is fully committed to becoming Thailand’s first Green and Sustainable Retail organization. To this end, the company has set long-term goals to reach net zero by 2050 and developed short-term 2030 goals with a strategic initiative called ReNEW.
In the aviation space, Airport Authority Hong Kong (AAHK), the statutory body overseeing Hong Kong International Airport (HKIA), is committed to ESG principles. Since pledging to become the World’s Greenest Airport, back in 2012, a decade of transformation has seen AAHK look to make good on its aspiration across every applicable ESG metric. Among other initiatives, AAHK has developed a carbon management plan which includes expanding the EV fleet from all airside saloon cars to other airside vehicles, electrifying and pooling of ground services equipment at the airport, and developing innovative energy management solutions such as the award-winning Weather Forecast for Air-conditioning Control System.
Focusing on Social Issues
While environmental considerations take most of the limelight when it comes to sustainability, companies also recognize the importance of the social and governance aspects of the equation in reaching their organizational goals.
For instance, ensuring that everyone has access to affordable financial products and services is critical when it comes to tackling the social issue of inequality globally. A large portion of the populations in many countries remain unbanked or underserved by the traditional financial system. This lack of access limits the opportunities of this group, trapping them in a cycle of poverty.
One financial services provider that has been dedicated to financial inclusion is Home Credit, which offers consumer finance solutions through its responsive mobile application, bringing credit and other financial services to millions of individuals underserved by traditional financial services institutions. Since its establishment in 1997, Home Credit has actively worked to provide a bridge to financial systems as one of three main pillars in its ESG strategy.
As the importance of ESG gains awareness in the business world, more companies are looking for guidance on how they can embark on this critical journey. Professional services firm CLA Global TS (formerly known as Nexia TS) has a long track record of working with their clients to help them reduce their carbon footprint. The firm also focuses on the social and governance aspects of ESG, as it balances the needs of people and regulators with that of the environment to promote ambitious, yet achievable targets for the companies it works with.
On November 1, the firm joined CLA Global, a leading global organization comprising independent accounting and advisory firms, as the group’s independent network member in Asia, covering Southeast Asia and China. CLA Global TS plans to play a pivotal role in developing the Sustainability Reporting and Advisory service standards within the CLA network. The firm’s Sustainability & Climate Change team has also branched out into advisory and compliance work by leveraging its experience in sustainability reporting.
As ESG continues to evolve in Asia, these companies and more are breaking new ground in the sustainability space, and shining a light towards a brighter future for all in the region and beyond.