Heat Is On For Companies To Strengthen ESG Practices

Top corporations are heeding calls by governments and investors to reconcile earnings with sustainable practices amid concerns over global warming.

Environmental, Social and Governance (ESG) investing, once considered a trend for millennials and younger investors, is fast gaining traction as a mainstream requirement for global corporations as the climate crisis intensifies. 

The historic 2015 Paris Agreement on climate change saw 195 countries and the European Union signing up to a common goal of keeping global temperatures from increasing more than 1.5 degrees Celsius to achieve climate neutrality by 2050, thereby ensuring that carbon emissions and removals offset each other.

The World Meteorological Organization, the foremost authority on global climate, says in its latest report that the odds for the world hitting the target of a yearly average of 1.5 degrees Celsius are 50-50. There is also the likelihood that the five years from 2022 to 2026 will be the hottest on record.

The good news is that an increasing number of organizations, from financial institutions and energy companies to real estate developers and leading manufacturers, are rallying behind governments to reduce carbon footprints and strengthen ESG efforts to achieve net zero targets.

Investors, both retail and institutional, are also aligning their portfolios to ensure that their money goes to responsible companies with clear ESG metrics—ranging from carbon footprint reduction, energy efficiency improvements, employee health and safety to product sustainability, the integrity of the company’s board of directors, and diversity and inclusion efforts across the organization.

One of the financial institutions guiding clients toward ESG investing is LGT Group, the world’s largest family-owned private banking and asset management group based in the microstate of Liechtenstein, a well-known economic powerhouse in Europe. The bank—owned by the Princely Family of Liechtenstein, who, as an entrepreneurial family, has transferred wealth across 26 generations for almost 900 years—provides wealth management services to private banking clients with sustainability as a core focus.

Another banking group, HSBC Global Private Banking, has research figures that indicate more than 82% of investors in mainland China, Hong Kong, Singapore and the United Kingdom rate sustainable, environmental and ethical issues as “quite” or “very important” to their investments. The bank is helping investors to future-proof their investment portfolios by choosing companies that are ESG-focused as they tend to deliver stronger earnings. With HSBC’s guidance, investors will also be able to invest while supporting the global movement towards a more sustainable and equitable future.

Product manufacturers, on the other hand, face different challenges as they need to utilize finite raw materials for production. But that is not stopping forward-thinking manufacturers from doing their bit to mitigate global warming.

Indonesia-based Asia Pacific Resources International Limited (APRIL Group), one of the largest pulp and paper producers in the world, has in place a one-for-one sustainability goal whereby every hectare of land used for commercial plantation is matched with an equal size of land set aside for conservation. At the company’s mills, 90% of the energy requirements come from renewable sources. APRIL Group also invests a dollar for every ton of fiber that is delivered to the mill, ensuring about US$100 million for conservation and restoration over the next 10 years. The company is leading by example to demonstrate that sustainability is not a zero-sum game and the pursuit of ESG goals need not be at the expense of profitability.

State-owned oil and gas companies are also rebranding themselves as “energy” companies as they transition towards carbon neutrality. One such company is Pertamina, Indonesia’s largest integrated energy company, whose biggest challenge today is energy security—or ensuring the uninterrupted supply of energy at an affordable price across an archipelago of more than 17,000 islands with a population of over 270 million. The company has rolled out several ESG programs and initiatives, such as developing an ecosystem that supports electric vehicles; introducing the use of biogas and waste materials in rural areas; recycling cooking oil; and promoting the conservation and restoration of the coastal and marine ecosystems. Pertamina is also building more solar power plants and harnessing renewable energy from hydro, geothermal and hydrogen as it journeys toward achieving net zero targets in line with the national agenda.

Meanwhile, in the real estate industry, Hong Kong-based Sino Group has signed on to support the United Nations Global Compact in 2020, as well as Business Ambition for 1.5°C and the Task Force on Climate-related Financial Disclosures in 2021, becoming one of the first real estate developers in Asia to commit to the global calls-to-action to contribute to a more sustainable future. The Group, having established its presence in Hong Kong for more than 50 years, is also setting targets to achieve net zero carbon by 2050. Guided by its “Creating Better Lifescapes” credo, Sino Group has introduced a wide range of eco-friendly and green initiatives to bring communities closer to nature.

Malaysia’s top corporations are also faring well in sustainability performance while transitioning towards carbon neutrality.

Top Glove, the world’s largest maker of gloves, headquartered in Malaysia, has not only set clear sustainability goals to achieve by FY2025, but it is also holding its management accountable with 40% of the team’s remunerations tied to ESG performance. Today, Top Glove has more sustainable products on offer, such as biodegradable nitrile gloves that can degrade at least 10 times faster than regular gloves, while their factories are increasingly shifting toward greater reliance on solar energy.

For Malaysia’s energy company, PETRONAS, the journey towards sustainability is via the circular economy model: by eliminating waste and pollution, circulating products and materials, and regenerating nature. Moving away gradually from activities that involve the consumption of finite resources, the global company, with a presence in more than 50 countries, is now providing renewable energy such as solar technology solutions and low-carbon fuels like natural gas as part of its energy offerings. In the past three years, PETRONAS has seen a threefold increase in demand for its clean energy and it will continue to scale up in this direction, possibly adding hydrogen as an alternative energy source.

Leveraging A Century Of Responsible Stewardship

LGT Private Banking offers its clients the opportunity to co-invest with the Princely Family of Liechtenstein in investment solutions that contribute positively to society and the environment.

Asian investors’ views on sustainable investing have transformed in recent years. In particular, the pandemic brought to light the extent to which social and environmental issues are deeply interconnected with global economic growth. Consequently, interest and awareness of sustainable investing have grown exponentially among wealthy investors in Asia, resulting in the popularity of investments that help to solve global challenges such as climate change and inequality. LGT Private Banking (LGT) is leading the way in facilitating their clients’ sustainability journey with tailored sustainable investment solutions.

For example, Asian investors are increasingly interested in financing the transition to a low-carbon economy and positively impacting society, so LGT supports clients by aligning their investment choices to capitalize on megatrends with a sustainability theme. These investments contribute to overcoming global challenges and achieving the United Nations’ 17 sustainable development goals (SDGs) in healthcare, climate action and digitalization.

H.S.H. Prince Max von und zu Liechtenstein, Chairman of LGT Group

LGT’s commitment to sustainability originates from the core values of the bank’s owners, the Princely Family of Liechtenstein, which can trace its history back 900 years, and which has held sustainable and long-term thinking in high regard for over a century. In practice, this translates into financial products that create and preserve lasting value for LGT and its clients.

“We have always been in the business of long-term sustainable returns. As we have been engaged in the forestry and agriculture sectors for centuries, we have long prided ourselves on our connection to nature and our understanding of the need to protect our delicate ecosystems,” says H.S.H. Prince Max von und zu Liechtenstein, Chairman of LGT Group.

This dedication to sustainability has been the foundation upon which the Princely Family of Liechtenstein has transformed LGT into a global player in the wealth management area. Today, the bank employs around 4,000 professionals, managing over US$300 billion worth of global assets from offices in 20 of the world’s key financial centers, including Hong Kong, Singapore, Tokyo, Bangkok, Sydney, Dubai, London and Zurich.

Holistic Sustainable Solutions

For more than 15 years, LGT has honed its unique expertise in sustainability-related solutions, with various public and private market offerings in sustainability-focused investments, impact investing and venture philanthropy. To ensure integrity in the sustainable investment process, LGT has developed proprietary Environmental, Social and Governance (ESG) tools to assess and measure the impact of its investments accurately.

LGT’s ESG Cockpit is designed to systematically evaluate the sustainable credentials of companies and countries in equities, bonds and funds. The tool indexes the material ESG factors of each proposition on a scale of one to five stars, indicating low to high sustainability quality of the investment. Known as the LGT Sustainability Rating, it has facilitated the creation of a holistic range of sustainable investment solutions offered to private banking clients at LGT. For instance, the LGT Sustainability Rating and the underlying ESG metrics are at the core of the investment selection process for sustainable discretionary mandates offered by LGT.

The LGT ESG Cockpit also allows clients to understand the positive and negative impact of their investments according to the 17 SDGs. This enables clients to select issues close to their hearts, such as climate change or societal well-being, and direct their investment to impact such issues positively.

Building on the 17 SDGs, LGT recognizes that preserving biodiversity and natural capital is critical to the long-term success of our global economy. Presently, biodiversity is incredibly difficult to analyze due to the ecosystem’s interconnectivity and dependencies. LGT assesses biodiversity risk in the investment portfolio through the environmental metrics within the LGT ESG Cockpit, such as a company’s reliance on natural resources, water usage and stress, and waste emissions. LGT plans to offer more nature-positive investment solutions as biodiversity data and research continue to evolve.

LGT also pursues its sustainability agenda through its partner company, Lightrock, a global private equity platform that was established to invest in businesses delivering tangible societal or environmental benefits. Lightrock employs a core team of 80 private equity professionals with extensive expertise in impact investment and portfolio management to carry out its mission.

A Pioneer in Impact Investing

Increasingly, investments are being categorized according to their positive or negative impacts on the world. LGT and Lightrock are working hand in hand to drive the growth of this strategy and contribute to a more sustainable form of capitalism in the process.

CMR Surgical is a British company developing the next-generation surgical robot Verisus.

Lightrock is a pioneer in impact investing and originated from LGT’s venture philanthropy practice, which began in 2007. Today, the firm manages a portfolio of more than 70 high-growth companies globally, which comprises one of the largest impact-focused growth portfolios across Europe, Latin America and India.

Several of its portfolio companies have since become unicorns, including CMR Surgical, which increases the availability of minimal access surgery through next generation robotics, and Lilium, a sustainable aviation company.

With LGT as its major investor, Lightrock provides direct private equity to mainly growth-stage entrepreneurs, typically offering to invest up to US$100 million. To make such investments more accessible to private banking clients, in 2021 LGT and Lightrock developed a joint impact fund offering. The impact fund, which raised more than US$900 million within the first three weeks of issuance, provided LGT clients with the unique opportunity to directly invest in rapidly growing, innovative and sustainable private businesses in Europe, Latin America and India.

A Proactive Net Zero Strategy

Reflecting its conviction in the importance of sustainability, LGT aims to reduce its greenhouse gas emissions from operations and discretionary investments to net zero by 2030.

The bank is a founding member of the UN Net-Zero Banking Alliance and is committed to the Partnership for Carbon Accounting Financials, developing a standard to measure financed emissions. It has also signed an agreement with Climeworks. This Swiss company will filter a part of LGT’s greenhouse gas emissions from the air and permanently store them in the ground from 2025.

Climeworks’ direct air capture plant in Switzerland.

LGT’s strategy for achieving net zero across its investments comprises three key elements. The first involves educating its clients about climate risks in their investment portfolios and providing them with the tools and advice to help manage those risks. Secondly, it identifies long-term investment opportunities in companies that are positioned to benefit from a transition to a low-carbon world. Finally, LGT’s net zero target requires it to engage with its investee companies actively.

“LGT has committed to net zero across all of its operations and its investment portfolio by 2030,” says Prince Max. “We have taken this step not only because it is imperative to address the climate crisis, but also because it represents an opportunity for our clients to better manage risks in their portfolios and identify long-term growth opportunities in light of the global transition to a low-carbon economy.”

APRIL Group: Sustainability Is Our Business Model

APRIL Group shares how its four key APRIL2030 pillars will help drive business growth, while having a positive impact on climate, nature and people.

Lucita Jasmin, Director for Sustainability & External Affairs, APRIL Group

For some companies, sustainability is merely used as a marketing tool to attract environmentally conscious customers, or even used as greenwashing. In the case of Asia Pacific Resources International Limited (APRIL Group), one of the largest producers of bio-based products, such as pulp and paper, in the world, sustainability is part of its DNA.

According to Lucita Jasmin, Director of Sustainability and External Affairs, APRIL Group, “Sustainability isn’t a vertical stream of activity in our business model. It is our business model.”

“Our expansion and growth in many parts of our business is driven by sustainability embedded across all divisions, from sales to forestry management, as well as in every part of what we do,” she says.

Ambitious Sustainability Goals

In November 2020, APRIL Group launched its APRIL2030 targets and commitments, which encapsulates the company’s vision on responding to global climate and sustainable development challenges. APRIL2030 comprises 18 ambitious targets across four commitment pillars: Climate Positive, Thriving Landscape, Inclusive Progress and Sustainable Growth.

“We have seen a global consensus emerge in recent years on the urgency to drastically reduce carbon emissions, and land use emissions are a key component of this. We recognize this and we are tackling our own carbon emissions through our APRIL2030 commitments and targets,” Jasmin says.

APRIL Group is committed to conserving and restoring one hectare of forest for every hectare of plantation.

The 18 targets include achieving net zero emission from land use, sourcing 90% of energy used to power its production mill from renewables and cleaner energy sources, reducing product carbon emission intensity by 25%, eradication of extreme poverty within a 50km radius of its operations, and a reduction of solid waste to landfill by 80%.

According to Jasmin, all four pillars of APRIL2030 are vitally interconnected—for example, climate change cannot be tackled without also protecting nature, and carbon reduction must go hand in hand with biodiversity conservation.

“That’s why we are tackling all four of our APRIL2030 pillars at the same time. We have designated Champions, members of senior management, for each of the pillars and they are supported by technical and operational working groups,” she says.

“Action plans have been mapped out and are being implemented in relation to all of our targets.”

APRIL2030 Progress

While these targets are by no means easily achieved, Jasmin says the company has made progress since the launch of APRIL2030 18 months ago.

Among notable progress made, the company last year completed the installation of one megawatt of solar panels at its operations in Pangkalan Kerinci, Jambi Province, Indonesia. This is the first phase of 20 megawatts of solar panels to be completed by 2025. It also launched two electric buses in September last year, supporting lower-carbon commuting for employees.

A decarbonization roadmap has been developed for its manufacturing operations, identifying opportunities where energy use can be reduced and where else the use of renewables can be optimized, along with the necessary investments.

“These form part of our efforts to use cleaner energy from renewables in our energy mix and reduce the use of fossil fuels,” she says.

As part of its efforts to eradicate extreme poverty within a 50 km radius of its operations, APRIL Group has expanded educational support to cover 172 schools.

APRIL Group has installed solar panels at its operations in Sumatra as part of its commitment to increased use of renewable energy.

Jasmin adds that APRIL Group has also been heavily investing in research and development and silvicultural improvements to increase the yield from its current renewable tree plantations, meaning it can expand its production capacity without expanding its plantation footprint.

“We have also carried out operational interventions around improved water management, particularly in peatland while we continue to advance peatland science and the scientific monitoring of greenhouse gas emissions on peatlands,” she says.

Commitment to Conservation

Even before the launch of APRIL2030, APRIL Group had committed to a one-for-one pledge: for every hectare of commercial plantation, the group will set aside an equal area for conservation. As of December 2021, APRIL Group is managing 360,200 hectares of natural forest and wetland areas to protect ecosystem functions and to conserve biodiversity.

“We are about 80% of the way to achieving our one-for-one conservation goal, where we match every hectare of plantation with a hectare of conservation and restoration forest,” Jasmin says.

One of the group’s flagship conservation programs is Restorasi Ekosistem Riau (RER). Established in 2013, RER is one of the largest ecosystem restoration projects in Southeast Asia. It consists of more than 150,000 hectares of peatland swamp forest on the Kampar Peninsula, in east Sumatra, Indonesia, that is home to hundreds of species of fauna and flora, some of which are endangered.

To ensure funding for nature and nature-based solutions, APRIL invests a dollar for every ton of fiber that is delivered to its mill. This will guarantee about US$100 million for conservation and restoration over the next 10 years, not just for APRIL’s concessions but for conservation projects in other parts of Indonesia.

“For us, growth and doing better for the environment are two sides of the same coin. It is about production and protection enabling each other,” she says.

Achieving Sustainable Growth

While working towards its APRIL2030 targets, APRIL Group has embarked on various initiatives to grow its business sustainably through circularity and diversification.

Recently, the company announced plans to invest 33.4 trillion Indonesian rupiah (US$2.32 billion) to build a paperboard production facility at its complex in Riau in support of the global transition from plastics to bio-based packaging.

The new paperboard production facility is just one of the group’s many Sustainable Growth initiatives. For many years, 100% of its fiber supply has come from renewable plantations and through R&D, and it has achieved a reduction of up to 10% in fiber required per ton of pulp production.

A total of 838 plant and animal species have been identified in RER, including the changeable hawk-eagle (Nisaetus cirrhatus).

Sustaining Momentum by Forging Partnerships

While recognizing APRIL’s early progress towards its targets, Jasmin understands that it is key to sustain the momentum right through to 2030.

Forging partnerships with the public sector, the communities and non-governmental organizations (NGOs) is crucial to continuing to move forward. For example, the RER project, which was launched in 2013, is operated in partnership with two NGOs: BIDARA and Fauna and Flora International.

“We also have a cooperation agreement with the Wildlife Conservation Society to support wildlife protection and conservation in Indonesia, including endangered species,” she says.

APRIL Group has also signed up to 1t.org, which is an initiative by the World Economic Forum that aims to mobilize, connect and empower the global reforestation community to conserve, restore and grow one trillion trees by 2030, and which is an engagement partner of the Science Based Targets Network for Nature (SBTN).

She adds that APRIL Group is hoping to demonstrate to the wider business community that growth can be achieved while also reducing carbon emissions, protecting biodiversity and empowering communities.

“By all accounts, this is Asia’s decade and we need to be able to seize this opportunity to do things differently, smartly and sustainably. We hope to be part of the driving force for this transformation between now and 2030, working in partnership with NGOs, local governments, environmentalists, and other stakeholders,” she says.


PETRONAS: Closing Loops With Circularity

From embracing the circular economy model to making new plastics from old, PETRONAS is committed to taking climate action, tackling carbon emissions and transforming plastic waste.

PETRONAS has partnered with Plastic Energy to explore plastic waste conversion into naphtha quality pyrolysis oil within a dedicated facility.

Businesses have a critical role to play in mitigating global warming, and global energy group PETRONAS is demonstrating how seriously it takes sustainability by embarking on a purposeful journey toward climate action.

This journey is supported by the circular economy concept, and a systemic approach that cuts across the group’s various businesses. In addition, in November 2020, PETRONAS announced its aspiration to achieve net zero carbon emissions by 2050, in alignment with the Paris Agreement on Climate Change and the 2030 Agenda for Sustainable Development.

PETRONAS has partnered with Plastic Energy to explore plastic waste conversion into naphtha quality pyrolysis oil within a dedicated facility.As a starting point, PETRONAS acknowledges that its operations rely heavily on finite natural resources and is aware of the consequent environmental footprint, from the hydrocarbon produced to the steel used in its facilities. “Therefore, it’s our duty to ensure that we consume responsibly and eliminate waste sustainably whilst ensuring long-term operations are run efficiently and safely,” says Ezrin Johanna Elias, Head of Circular Economy, Corporate Strategic Planning at PETRONAS. “Circular economy perfectly unlocks this for us,” she adds.

Ezrin Johanna Elias, Head of Circular Economy, Corporate Strategic Planning at PETRONAS

The principles of circular economy—eliminate, circulate and regenerate—have been adopted by many parts of the group, from upstream to downstream, across the nonenergy business segments in property, education and shipping, at varying levels of maturity and scale. “So, we have a foundation, and we are already seeing great results, especially on increased efficiencies,” says Ezrin.

Responsible businesses maintain profitability without overlooking the needs of society and the conservation of the environment, and PETRONAS is no different. One of the company’s key strategies is to keep adding value to its existing businesses. This is achieved by having an inclusive collaborative platform, not just within the group, but also with other industries as well. “Circularity works best when the ecosystem partners work together,” says Ezrin. “This complements the national agenda well, as there is a strong drive to push for circular economy in Malaysia, too.”

Rethinking Progress with New Models

Conventionally, industrial development has relied on exploiting natural resources based on the “take-make-dispose” approach—a linear economic model. Such a model is increasingly being shunned as businesses rise to meet the global demands for greater accountability of their actions. Brands that instead embrace the circular economy model within their modus operandi seek to decouple economic activity from the consumption of finite resources.

PETRONAS, being at the heart of many economies as a provider of energy, feedstock and energy-related solutions, has pivoted into circularity as a grounded way of aligning with international Environmental, Social and Governance standards. The company believes this will have positive multiplier effects on its partners and value chains.

Making this tectonic shift towards circularity, however, requires considerable investment, from reframing business models to technological advancement. For PETRONAS, such investments toward sustainable outcomes mean shoring up circular carbon, waste-to-product projects and bio solutions, essentially creating sustainable value. These are helping to put the group on course to realize their “net zero aspiration and sustainability agenda.”

One innovation that is underway involves plastic waste being processed into high-quality plastics that are recyclable indefinitely, bringing the prospect of cleaner land, beaches and seas a step closer.

Mohd Yusri Mohamed Yusof, Senior Vice President of PETRONAS and Managing Director/CEO of PCG

New Plastics from Old, Then Repeat

Deeply concerned by plastic pollution, the Malaysia government called for a move away from single-use plastic and plastic pollution through the Malaysia Plastics Sustainability Roadmap 2021-2030, and PETRONAS Chemicals Group Berhad (PCG) responded swiftly with its own initiative.

In 2019, PCG rolled out its New Plastics Economy (NPE) initiative to address plastic waste and pollution issues. A four-pronged approach followed suit, encompassing education, innovation, infrastructure and clean-up. There are clear goals in place, too. “PCG targets to recover 100% of plastic waste equivalent to our domestic polymer sales volume by 2030,” says Mohd Yusri Mohamed Yusof, Senior Vice President of PETRONAS and Managing Director/CEO of PCG.

Recognizing the importance of strategic partnerships, PCG has signed a memorandum of understanding (MoU) with Plastic Energy Ltd. The UK-based advanced plastics recycling technology company will help develop a solution that turns non-recyclable plastic waste into naphtha quality pyrolysis oil. This matter can then be made to produce polymers as a feedstock for plastic production, demonstrating the circularity of plastics in motion.

Going a mile further, PCG and Plastic Energy is jointly performing a feasibility study to establish a facility to convert plastic waste into naphtha quality pyrolysis oil. To complement this process, PCG signed an MoU with KDEB Waste Management and One Biosys to enable a constant supply of plastic waste material. Thus, the potential for PCG to offer certified circular polymers is there, presenting a new offering altogether for future responsible plastic application and consumption.

With such progressive initiatives, PCG has taken a leading role in Malaysia to influence and collaborate with plastic waste operators for plastic waste recovery, segregation and recycling. PCG is also a founding member of the Malaysia Plastic Pact, which drives the implementation of the Malaysia Plastics Sustainability Roadmap.

And the company has no intention of stopping there. “PCG will continue to explore similar opportunities with others who are interested to be part of PCG’s circular economy agenda,” says Yusri, referring to policymakers, small businesses and non-governmental organizations. Apart from ensuring engagement with “everyone in the ecosystem,” this is also “to obtain much-needed support to implement circular economy effectively and holistically,” he says.

Internally, PETRONAS is seeking to engage its operating and business units, including PETRONAS Gas Berhad, to improve the recovery of recyclable materials. Along with the distribution of educational materials in schools and clean-up activities in local communities, PCG is aiming to embed the idea of environmental preservation far and wide.

Some businesses might wonder if plugging into the circularity model is a costly affair. “I think the notion of circular economy solutions being deemed ‘expensive’ needs to be reframed if we are serious about the energy transition,” says Yusri. “Sustainability should be at the heart of an organization’s purpose and strategy, and we need to rethink how we consider value.”

The price of externalities is also a factor for consideration, driving home the need for collaboration in research and technology. “We must be willing to share the risks. Also, we must be practical that adoption will not happen overnight,” adds Yusri.

Augmenting the Renewable Energy Portfolio

Using renewable energy in the circularity model completes the loop. Beyond providing low-carbon fuels such as natural gas, PETRONAS has taken definitive steps toward providing renewable options—a “step-out strategy” into the wider energy space. Its production complexes, MMHE shipyard, Universiti Teknologi PETRONAS, PETRONAS Research Centre, even Suria KLCC, are fitted out with solar photovoltaic systems. And it offers solar technology solutions to clients such as Lotus’s Stores in Malaysia, and to Hilton, Intel and Schlumberger overseas.

Amplus solar farm in Karnataka is India’s largest single-location, open-access solar farm.

The group has big ambitions to grow in this space, with midterm targets of producing three-gigawatt energy capacity from renewable sources by 2024. In the past three years, the group’s renewable energy capacity has tripled, and there are plans to scale up further, including hydrogen. This paves the way for PETRONAS to realize renewable energy as one of the primary energy sources in their portfolio—yet another important step in the company’s journey toward climate action.

Sino Group Creates Better Lifescapes

The Hong Kong-based developer pursues sustainable development through its interconnected pillars of Green Living, Innovative Design and Community Spirit.

Central to Hong Kong’s largest ever urban redevelopment scheme, the 1,999-unit Grand Central breathes new life into the established community and provides an urban oasis with its sustainability features.

Established in Hong Kong in 1971, Sino Group has grown alongside its home city into one of the region’s leading developers. Today, the Group has operations in Hong Kong, Mainland China, Singapore and Australia, with more than 250 projects that collectively span over 130 million square feet, and a team that counts more than 11,000.

Sino Group comprises three listed companies—Sino Land Company Limited (HKSE: 0083), Tsim Sha Tsui Properties Limited (HKSE: 0247) and Sino Hotels (Holdings) Limited (HKSE: 1221)—as well as private companies held by the Ng family. Its portfolio encompasses a full range of property services and multiple sectors, from seaside villas to large-scale estates, from high street shops to mega shopping malls, from industrial buildings to Grade A office towers, and from exquisite residences to beautifully presented hotels housed in heritage landmarks.

Some of the Group’s notable projects include: Grand Central in Kwun Tong, the capstone project of Hong Kong’s largest ever urban redevelopment scheme; Lee Tung Avenue, the beautiful tree-lined boulevard in the heart of Hong Kong Island; St. George’s Mansions in the legendary Kadoorie Avenue neighborhood; Hong Kong Gold Coast by Castle Peak Bay; Exchange Tower in Kowloon Bay; and the Olympian City precinct in West Kowloon.

Creating Better Lifescapes 

For more than half a century, Sino Group has been guided by its mission of “Creating Better Lifescapes”, where the community thrives in harmony by embracing green living and wellness, pursuing meaningful design, and seeking innovation while respecting heritage and culture. This is brought to life through work in the three interconnected pillars of Green Living, Innovative Design and Community Spirit.

Sino Group has introduced a wide range of eco-friendly and green initiatives to bring communities closer to nature. In addition to its award-winning Mission Green series, it has established integrated community farming project Farm Together. Through this initiative, the Group has established 15 farms in Hong Kong and one in Singapore, with a combined area of more than 53,000 square feet, where staff, tenants and community partners can enjoy the soothing environment. The Farm Together initiative also enhances biodiversity and helps to mitigate the heat island effect.

The Group is passionate about incorporating innovative design into its projects. In 2018, it established Sino Inno Lab, a sandbox platform that helps technology companies to test out their inventions while facilitating co-creation of PropTech (property technology) solutions to enhance the customer experience. In its efforts to de-carbonize, the Group is deploying diesel-free energy storage systems to power activities on construction sites.

Community spirit is another guiding principle for Sino Group. Through conservation projects such as The Fullerton Hotels in Singapore and Sydney, the Group breathes new life into heritage buildings while preserving architectural gems for future generations. As a committed corporate citizen, Sino Group works on art and cultural projects while promoting volunteer services and encouraging community engagement.

Grand Mayfair, with lush landscaping and comprehensive facilities, brings lakeside resort lifestyle to life.
Wellness, fitness and recreational amenities at Grand Mayfair.

Championing Sustainability 

Sino Land has been a constituent member of the Hang Seng Corporate Sustainability Index Series since September 2012 for its continuing efforts in promoting sustainability.

In 2020, Sino Group unveiled its Sustainability Vision 2030, a blueprint charting the course toward 2030 and beyond. It details the Group’s vision in crucial areas such as decarbonization, renewable energy, smart energy management, plastic reduction, green building certification and innovative solutions for a more sustainable future.

Stepping up its efforts on sustainability, Sino Group signed up to support the United Nations Global Compact in 2020, as well as Business Ambition for 1.5°C and the Task Force on Climate-related Financial Disclosures in 2021, becoming one of the first real estate developers in Asia committing to the global calls-to-action to contribute to a more sustainable future. The Group is also collaborating with universities on setting science-based targets and developing a holistic roadmap to achieve net zero carbon by 2050.

Reflecting on the Group’s journey, Daryl Ng, Deputy Chairman of Sino Group, says, “Our commitment to excellence and community spirit will continue to guide us as we Create Better Lifescapes in the next 50 years and beyond. We shall continue to uphold sustainable practices while creating value for our stakeholders.”

Catalyst Analyst For A Sustainable Future

Pertamina, Indonesia’s leading integrated energy company, shares its plans to support the country’s decarbonization efforts and its progress to date.

As the largest integrated energy company in Indonesia, Pertamina understands its role in supporting the country’s efforts to achieve net zero emissions by 2060 will require the firm’s long-term commitment to reducing its greenhouse gas emissions.

In addition to the long-term commitment, all stakeholders, including the Board of Directors (BOD), all employees, and the vendor ecosystem must be on board.

Pertamina has established a Sustainability Committee chaired by its President Director and CEO Nicke Widyawati to oversee the implementation of such policies. The committee consists of many members of the BOD as well as subject matter experts.

“To ensure our efforts are accepted worldwide, we follow global sustainability standards such as Sustainable Development Goals (SDGs), and the Task Force on Climate-related Financial Disclosures (TCFD), and we participate in international activities such as the UN Global Compact, and the Carbon Disclosure Project (CDP). Even our sustainability disclosures adhere to global standards,” explains Widyawati.

“At the same time, there must be a sense of urgency, since the energy transition cannot be postponed. Pertamina realized the urgency years ago, and moved forward.”

One of Pertamina’s new areas of renewable energy operations: Lahendong Geothermal Power Plant Units 5 and 6, Tampaso, Minahasa Regency, North Sulawesi.

Greater, Greener Responsibilities 

This year, Pertamina’s President Director, CEO, and leader of the company’s energy transition has additional responsibilities. As Chair of the Energy, Sustainability & Climate B20 Task Force, Widyawati has been tasked with developing policy recommendations for a green energy transition.

Energy security, which includes replacing energy resources, is one of the key issues the task force will address.

“As we move towards net zero emissions, energy security becomes even more vital,” says Widyawati, who appeared on Forbes’ list of the World’s 100 Most Powerful Women in 2020 and 2021.

The task force will also focus on ensuring an affordable and fair transition by addressing energy poverty and securing global cooperation to mitigate climate change.

Leading the Sustainable Journey

As far as sustainability issues are concerned, Pertamina is not a newcomer. It has been improving its energy efficiency across all of its operations for many years, and has undertaken numerous initiatives to improve the environment.

Pertamina currently has eight priority programs involving environmentally friendly and green energy initiatives. As part of the B20 initiatives, these programs contribute to the G20 Sustainable Energy Transition plan.

The initiative has the potential to offset more than 100,000 metric tons of greenhouse gases per year. That’s equivalent to driving 21,547 gasoline-powered passenger vehicles for a year. In addition to transportation and marine ecosystems, the eight priority programs—which will be expanded throughout Indonesia—also include waste cooking oil recycling and energy efficiency.

The first program involves the development of the electric vehicle ecosystem in Jakarta. A partnership between Pertamina and the home-grown ride-hailing firm Gojek aims to decarbonize the country’s transportation system through the implementation of an electric motorcycle ecosystem, where Pertamina will provide all the supporting infrastructure, including battery swapping stations (BSS) and batteries.

President of the Republic of Indonesia Joko Widodo during the launch of the Electric Vehicle Ecosystem at one of Pertamina’s gas stations in Jakarta, Tuesday, February 22, 2022.

The second and third programs are focused on Bali. One involves installing solar panels in all the gas stations in the province, while the other involves installing BSS in gas stations. Several gas station owners have already agreed to the installation, and Pertamina is in the process of negotiating with many others.

Improving Coastal and Marine Ecosystems, and Becoming Energy Independent

A fourth priority program—Desa Energi Berdikar (Independent Energy Village Program)—involves the development of New & Renewable Energy (NRE) by utilizing various renewable energy sources, such as solar, wind power, biogas, and waste, in some of the rural areas of country.

Currently, there are more than 10 independent energy villages, with a total energy production of 35,400 kilowatt-hour and 95,400 liters of fuel alternatives. There is also an increase in community income of more than 870 million rupiah (US$59,432) per year.

The fifth, Blue Carbon Initiative, is linked to the conservation and restoration of the coastal and marine ecosystems, in addition to empowering the local community to manage climate change. It also includes planting one million mangrove trees in an area of 100 hectares in the Mahakam Delta, Kalimantan.

The sixth program involves Pertamina’s development of solar power plants in the area of Pertamina Hulu Rokan, Riau. This project is expected to offset 23,000 tons of greenhouse gas emissions annually, based on the results of a feasibility study completed in the first quarter.

Success in Innovation

Pertamina’s last two priority programs demonstrate the company’s advancement in the area of geothermal energy and the utilization of used cooking oil (UCO). It completed the construction of a binary cycle geothermal power plant in Lahendong, North Sulawesi, in the first quarter. Lahendong’s 500kW plant, which could offset 521 tons of carbon per year, is expected to help reduce operational costs for its plants.

Meanwhile, at Pertamina’s Cilacap Refinery in Central Java, the company is revamping and upgrading its existing Treated Distillate Hydrotreating units to convert refined, bleached and deodorized palm oil into hydrogenated vegetable oil, which is a form of renewable diesel.

Among Pertamina’s internal energy transition initiatives are the solar panels with 1,35-megawatt peak (MWp) capacity located in the RU IV Cilacap refinery area, which are projected to reduce CO2 emissions by 1,635 tons per year.

Green Energy Projects and Portfolios

As part of its efforts to support Indonesia’s targets to achieve 23% renewable energy use by 2025 and 31% by 2050, Pertamina has also embarked on several green energy projects and portfolios, such as the plan to double its geothermal power plant capacity to 1,128MW by 2026, the development of green hydrogen, and other NRE activities.

Recognitions on the International Stage 

Its sustainability and ESG efforts are recognized locally and internationally. In September 2021, Pertamina received an ESG Risk Rating of 28.1, indicating a medium risk of experiencing a material financial impact from ESG factors by Sustainalytics, which rates the sustainability of listed companies. With this score, Pertamina sits among Global Energy Players such as Repsol, ENI, PTT Thailand, and TotalEnergies in terms of management.

Pertamina won the Bronze Award in the Sustainability Reporting category at last year’s Global Corporate Sustainable Award organized by the Alliance for Sustainable Development Goals and the National Center for Sustainability Reporting. It also received the Gold Rank in the 2021 Asia Sustainability Reporting Rating event.

Additionally, Pertamina’s Sustainability Report was among the top 10 at the International 14th Annual Corporate Register Reporting Award (CRRA) 2021 in two categories, namely Credibility through Assurance (Top 5) and Best ESG Report (Top 8) last July.

“Pertamina is set to be the catalyst of energy transition in Indonesia. Through ongoing initiatives and future plans, we hope to continue to play a leading role in Indonesia’s sustainability agenda,” Widyawati says.

Top Glove Continues To Bolster Sustainability Efforts

As the climate crisis intensifies, global corporations around the world, such as Top Glove, are rallying to achieve net zero carbon emissions by prioritizing their Environmental, Social and Corporate Governance (ESG) goals.

“Sustainability is at the heart of our business,” says Tan Sri Dr Lim Wee Chai, Top Glove’s Founder and Executive Chairman.

Last year, Top Glove Corporation, the world’s largest manufacturer of gloves, declared 2021 as its “Year of ESG”, making it a corporate mantra while launching several sustainability initiatives.

“From this year onward, we are bolstering our sustainability efforts with several midterm targets to achieve by FY2025 across the ESG spectrum,” says Tan Sri Dr Lim Wee Chai, Top Glove’s Founder and Executive Chairman.

Environmental: Achieving Carbon Neutrality and Developing Green Gloves  

“We have long been an advocate of environmental stewardship,” says Lim, referring to the industry term that describes the responsible use and protection of the natural environment through sustainable practices such as water harvesting and recycling, the use of recyclable packaging materials, and reducing the carbon footprint.

“By FY2025, we aim to reduce carbon emission intensity by 25%, as well as the total consumption of electricity, natural gas, and water. Our water treatment plants are already carbon-neutral, and our office premises and warehouses will follow suit by FY2025. An additional 27 factories will also shift toward greater reliance on solar energy within the next three years.”

Top Glove’s increasing use of renewable energy was demonstrated by a recent deal with Japan-based Shizen Energy Inc.’s Malaysia subsidiary to supply solar-generated electricity for 20 years. That is equivalent to planting 400,000 trees per year to offset CO2 emissions.

To meet the challenge of adapting to a new market that favors sustainable products, the company now offers Forest Stewardship Certified (FSC) gloves, biodegradable nitrile gloves that degrade at least 10 times faster than regular gloves, and bio-based Chlorinated Polyethylene (CPE) nontoxic gloves as part of its current product mix.

Social: Going Vegetarian and Taking Care of Employees’ Physical and Mental Health

“People are the backbone of our business. We not only care for the livelihoods of our 22,000 employees, but are also committed to providing the best work environment for them.”

With its unique health-centric culture, Top Glove employs a team of in-house medical professionals, wellness experts and fitness instructors to ensure the physical and mental wellbeing of its employees. Its health benefits include annual health screenings, guided gym training, and subsidized vegetarian meals to promote good health and reduce carbon footprint. Last year, the company launched a Zero Harm on Mental Health program to complement its Zero Harm and Safety Health Emergency Preparedness program.

As a result of its commitment to human resource excellence, Top Glove was voted one of HR Asia’s Best Companies to Work for in Asia 2020 by Business Media International, marking the fifth consecutive year the company has won this award. It plans to recruit up to 6,740 graduates by the end of FY2022, and to create 30,000 jobs by FY2025.

“Over the years, we have refined our labor practices to be consistent with global best practices and standards set by international bodies such as the Sedex Members Ethical Trade Audit (SMETA) and the International Labour Organization (ILO),” says Lim.

Governance: Promoting a Responsible Corporate Culture and Zero Tolerance for Corruption

In terms of corporate governance, Top Glove has implemented several new policies to foster a responsible corporate culture. Among them are the whistleblowing policy and the capping of independent directors’ tenure at nine years without extension. The company also has an Anti Bribery Management System in place to prevent corruption.

Top Glove targets to recruit up to 6,740 graduates from 1 September 2021 to 31 August 2022 (FY2022) and create an additional 30,000 jobs by FY2025.

Top Glove’s ESG initiatives are championed by the company’s Board and communicated internally and with stakeholders outside the company. There are also clear definitions for ESG reporting with quantitative indicators. The company is walking the talk by holding its management accountable with 40% of the team’s remunerations tied to ESG performance.

There will be additional audits to ensure continued compliance with global standards while existing Morgan Stanley Capital International (MSCI), Dow Jones Sustainability Indices (DJSI) and Financial Times Stock Exchange Group (FTSE) Russell index ratings will be strengthened.

Beyond the organization itself, the company is committed to implementing 100% traceability across the supply chain to ensure suppliers are ESG-compliant, too.

For the first time, Top Glove has been recognized as an “industry mover” in The Sustainability Yearbook 2022 by S&P Global, a distinction accorded to only 53 corporations worldwide.

As a result of outstanding performance in gender reporting and implementing measures to advance gender equality in the workplace, the company also saw its maiden inclusion in the Bloomberg Gender Equality Index in 2022.

“In our role as a responsible global company, sustainability is at the heart of our business, and we have made it a priority to invest resources toward safeguarding the environment, advancing ethical business, building communities, and making a positive impact on lives. We aim to make our ESG practices even more robust in the long run,” says Lim.

Post-pandemic Challenges: Strengthening Talent and Investing in Technology

In terms of sales performance, FY2021 was an extraordinary year for the company. Top Glove’s sales revenue rose to US$3.86 billion while the profit after tax was US$1.85 billion, an increase of 126% and 337% respectively, compared with the previous year.

As the world moves into the post-pandemic recovery phase, Top Glove’s exceptionally robust sales, spurred by the global demand for personal protective equipment such as gloves and face masks amid the spread of Covid-19, may not be sustained.

Top Glove’s factories will increasingly be powered by solar energy.

“While we delivered very strong results in the two years when Covid-19 was at its peak, we are aware that the supernormal demand will not last. As the pandemic comes under control, the demand for gloves will return to pre-pandemic levels, perhaps stabilizing at a higher level due to increased awareness of healthcare and hygiene,” adds Lim.

“This is an inevitable part of the business cycle, and we have gone through roughly half a dozen such cycles over the past 31 years, each time coming out of it better and stronger.”

Meanwhile, Top Glove will be deferring its expansion plans over the short term and focusing on improving product quality and work efficiency. The company will also continue to invest in technological innovations, automation, digitalization, and R&D, while also strengthening its talent pool.

“We have customer and manufacturing bases spread out globally and a diverse product range of nitrile, natural rubber, vinyl, and surgical gloves. Our production capacity of 100 billion gloves annually is the largest among all glove manufacturers worldwide, and this allows us to handle large orders from distributors,” Lim says in response to a question about whether competition from new players in the glove industry worried him.

HSBC: Investing In The Global Transition To A More Sustainable Future

James Cheo, Chief Investment Officer for Southeast Asia at HSBC Global Private Banking and Wealth, explains why sustainability is crucial to investment decisions in today’s fast-changing world.

James Cheo, Chief Investment Officer for Southeast Asia at HSBC Global Private Banking and Wealth

The Covid-19 pandemic and a rapidly changing macroeconomic outlook have brought unprecedented risks and volatility to financial markets, while the urgency to fight climate change has become one of the biggest challenges facing governments and industries.

These developments have prompted investors to rethink their approach to investing and seek new ways to future-proof their portfolios. More than ever before, many are turning to sustainable investing to achieve long-lasting wealth.

“Employing ESG [Environmental, Social and Governance] factors is a must,” says James Cheo, Chief Investment Officer, Southeast Asia at HSBC Global Private Banking and Wealth. ESG refers to a set of criteria and metrics that are commonly used to evaluate the impact of a company’s activities before making an investment decision.

“This will not only reduce the risk when it comes to investing, but also improve the resilience of your portfolio over the long run. That’s because the quality companies that you choose to invest in tend to deliver stronger, more sustainable earnings,” Cheo adds. It also allows investors to support the global movement toward a more sustainable and equitable future.

The trend of aligning one’s values with investment decisions is taking off, especially among younger investors. A survey by HSBC Global Asset Management last year found that more than 82% of investors in mainland China, Hong Kong, Singapore and the United Kingdom rate sustainable, environmental and ethical issues as “quite” or “very important” to their investments.

But the investors estimated that, on average, they explicitly consider ESG factors for only around 28% of their current investments, according to the survey. That reveals a gap between investors’ intentions and their actions. To help investors bridge the gap, HSBC has made sustainable financing and investment a priority, and it sees the global transition to a net zero economy as a major opportunity for investors.

“Sustainability is at the core of what we do. It’s extremely important and central to our investment decisions,” says Cheo. “It is a journey and there will be challenges along the way. Ultimately, our role is to help our clients through this transition. We believe that every portfolio should and can be sustainable, with ESG at its core.”

Seaweed farm, China

Opportunities in ESG Investing  

Investors surveyed by HSBC Global Asset Management cite a lack of suitable investment products and not wanting to limit their choices as major barriers to sustainable investing. But Cheo says sustainable investment opportunities have increased tremendously in the past few years as more investors—especially those in Asia—become interested in the space, and the market for ESG products mature.

“Investors should start to take that first step to be invested,” Cheo says. He suggests incrementally increasing one’s ESG investments, “because that’s going to be a very important pillar to investing, especially in the years ahead.”

He shares three broad themes that are poised to offer investment opportunities in the years to come:

Energy Transition
An increasing number of governments and industries have made net zero carbon emissions pledges, and the transition to a low-carbon future is set to involve major reconfigurations in the way industries and society function.

Solar panels, China

Winners from this megatrend will be companies that successfully adapt to the transition. Producers of low-carbon or renewable energy, as well as those developing new technology that help the world in the transition, will also benefit.

In Asia, China’s ambition to reach net zero emissions by 2060 will herald a green revolution, with significant investments aimed at increasing the use of clean energy, promoting electric vehicles and greening supply chains.

Protecting Biodiversity
Research by the World Economic Forum found that more than half of the world’s GDP is moderately or highly dependent on nature. So, damage to nature and biodiversity threatens global economic activity. The winners in this area will be companies in the circular economy, which promotes recycling and reusing products for as long as possible to reduce waste.

Social Factors
The social pillar of ESG investing is receiving more attention as research shows that socially responsible companies perform better in the long term. This is because companies with a more diverse workforce, as well as those that respect human rights and focus on developing talent, tend to have stronger leadership, happier employees and more resilient operations.

Wind farm, Otago, New Zealand

Navigating Economic Uncertainties  

Financial markets are likely to remain volatile in the coming months, given higher inflation, slowing economic growth and the likelihood of further interest rate hikes. “Such an environment requires investors to be more proactive in strengthening the resilience of their portfolios,” says Cheo.

ESG investing could help investment portfolios navigate current uncertainties and prepare for the major transition towards a greener and more equitable future. “Look for quality companies that can thrive with higher prices, that can navigate a volatile environment,” adds Cheo. “That’s why we believe that ESG leaders are going to be one of the winners that will come out from this uncertain macro-environment.”

Approaches to Sustainability-themed Investing

James Cheo shares that there are multiple ways to invest sustainably. Here are three of the most common approaches:

Firstly, investors can consider negative screening. This method involves excluding companies that are not aligned with investors’ values or investment objectives. For example, some investors exclude tobacco companies from their portfolios due to the harmful effects of smoking on health.

Secondly, investors can look across sectors and asset classes for companies that have high ESG scores. ESG is a set of criteria that evaluates how a company operates in relation to environmental (such as how it uses energy or manages waste), social (such as the treatment of workers) and governance (such as its choice of board members) factors. Companies with high ESG scores are seen as better managed, and thus more likely to do well in the long term.

Thirdly, investors who want to achieve certain environmental or social objectives alongside financial returns can do that through a practice known as impact investing. For example, investing in research and development aimed at finding cures to diseases, or new technology to improve access to banks.



The information contained in this article has not been reviewed in the light of your individual circumstances and is for information purposes only. It does not purport to provide legal, taxation or other advice and should not be taken as such. No client or other reader should act or refrain from acting on the basis of the content of this article without seeking specific professional advice. Issued by The Hongkong and Shanghai Banking Corporation Limited.

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