Published on November 9, 2023, 4:04 am
ASEAN, the Association of Southeast Asian Nations, is on track to become the fourth-largest economy globally by 2030. The region’s strong economic prospects are driven by favorable demographic trends, increasing income levels, rapid technology adoption, and a burgeoning consumer market.
However, as ASEAN prepares for this projected growth, businesses in the region face a significant responsibility. They must strike a delicate balance between the long-term goal of achieving a net-zero future and the short-term need to protect their bottom line.
Driven by customer demand, investor expectations, and government sustainability mandates, organizations are increasingly striving to incorporate Environmental, Social, and Governance (ESG) considerations into their actions and investments.
Currently, all ASEAN countries are members of the Sustainable Stock Exchange Initiative and have issued green bonds at either the government or corporate level. However, it remains uncertain whether these organizations are effectively setting and achieving their sustainability goals.
A recent study conducted in collaboration with Ecosystm, a technology research firm, provides insights into how sustainability is being prioritized within ASEAN enterprises. The Kyndryl ASEAN Digital Transformation Study 2022 engaged over 500 C-suite leaders from various organizations in the region to explore their sustainability goals.
The study revealed that 77% of organizations in ASEAN are focusing on becoming sustainable. However, many of these organizations lack clear sustainability goals, making it challenging for them to determine where to start and how to execute their initiatives. Only 23% of organizations have an established corporate sustainability strategy in place.
Even among those with a documented strategy for sustainability, many fail to consider all necessary aspects required to achieve their goals comprehensively. Budget allocation tends to be the primary focus for most organizations regarding sustainability initiatives. Still, they often overlook crucial factors such as identifying the right skills and data needed to support these initiatives effectively.
Interestingly enough, only 4% of organizations have adopted a holistic strategy that encompasses all areas necessary for successful sustainability initiatives. Many organizations primarily concentrate on external challenges and the complexities of reporting frameworks, neglecting the broader scope of sustainability integration.
Data availability represents one of the top three obstacles faced by ASEAN organizations engaging in sustainability projects. In today’s data-driven world, organizations often have access to the necessary data to support their sustainability efforts; however, integrating this data into their overall strategy proves challenging. Organizations struggle to identify the right datasets, collect required data across all operations, and embed analytics that provide valuable insights. Obtaining the necessary data can take up to two years, delaying progress in setting science-based targets.
While sustainability remains a work in progress for many sectors, several industries are leading the way. Industries like Media and Telecoms, Energy and Utilities have followed sustainable practices due to cost-related incentives offered for future survival. The technology sector has also played a pivotal role by empowering customers to transition to cloud services, which can contribute to remarkable energy efficiency gains.
Various other industries have embraced smaller yet impactful eco-friendly measures. For instance, Retail focuses on reducing plastic usage in packaging and sourcing local products to minimize carbon footprints. The Hospitality industry introduces energy-efficient lighting systems and implements measures such as linen recycling to conserve water.
Across all industries, there is an increasing integration of sustainability principles within corporate environments as key drivers such as poverty alleviation, diversity promotion, and circular economy support become mainstream concepts.
Traditionally viewed as cost centers, sustainability initiatives now present opportunities for organizations to create value and differentiate themselves. This paradigm shift emphasizes potential business benefits arising from robust ESG strategies.
To truly drive sustainable success within an organization, there must be a strategic integration of sustainability with digital transformation efforts. This alignment generates stronger business performance outcomes. Moreover, organizations should collaborate with partners who share aligned goals and hold them accountable for sustainability commitments.
A crucial starting point for organizations is adopting a data-first approach that addresses challenges related to data availability. Unlocking the full potential of data is pivotal for driving a comprehensive approach to sustainability objectives.
Ultimately, achieving sustainable practices requires embedding sustainability as a core component of an organization’s principles, receiving buy-in from the C-suite, and making it an integral part of the company culture. Leadership in sustainability initiatives is essential across businesses of all sizes and industries throughout ASEAN.
In conclusion, while ASEAN prepares to become a major global economy, organizations face the challenge of aligning their sustainability goals with their bottom line. By integrating sustainability efforts into their strategies and leveraging technology and data-driven insights, organizations in ASEAN can pave the way for a sustainable future that benefits both society and their business outcomes.