“APAC” & Corporate Sustainability Journeys – Monitoring Progress & Demonstrated Leadership on the Rise in This Vital Global Region

May 24 2021

by Hank Boerner – Chair & Chief Strategist – G&A Institute

Business and financial activities in “APAC”, the Asia / Pacific Basin Region are vital to the economies of the rest of the world.

Think of the region’s leading sovereign economies…in order of magnitude, consider the impact of the economies of China, Japan, India, South Korea, Australia, Indonesia (the top economies).

These six countries are;

  • home to some of the world’s lower cost manufacturing and assembly centers,
  • sources of financing for companies and other government entities, sourcing points for many of the world’s natural resources and food and industrial ingredients,
  • sources of value-added manufactured products (such as the chips used in a multitude of consumer and business IT applications such as smartphones and electric vehicles).

The good news is that the region is also home to a growing number of corporate sustainability leadership companies. 

For example, CDP reports that “despite many challenges in 2020” companies disclosing on TCFD-aligned reporting reached a global high — and that included more than 3,000 companies in 21 Asia Pacific Region (“APAC”) countries responding to CDP for the first time…and that now account for almost a third of CDP’s global corporate responses.

ESG Leadership Progress:  The majority of the 3,000 APAC companies report having a board-level oversight on climate-related issues (79%) and say that they are beginning to integrate climate issues into business strategy.

Half say they have integrated incentives in management of climate issues, including attainment of targets.

Three of four APAC companies responding to the CDP survey say they have identified climate risk as maybe having substantive impact on their business and 60% of these are transition risk.

Climate Change Impact:  CDP in its Global Climate Risk Index 2021 found that 60% of countries most affected by climate change from 2000 to 2019 are in Asia.

McKinsey consultants estimates that the impact on labor productivity due to chronic increases in heat and humidity could cost Asia as much as US$4.7 trillion in of annual GDP by 2050.

We are sharing CDP’s recap of the survey responses for 2021 as a Top Story.

Looking at the smaller economy of the region, Sustainalytics’ manager Frank Pan focuses on ASEAN-6 nations and reports that in the context of sustainable investing moving from “niche” to mainstream, this trend is still limited those Southeast Asian countries — even though the region is an economic block with one of the world’s fast-growth rates.

The ASEAN-6 countries: Singapore, Malaysia, Thailand, Vietnam, Indonesia, the Philippines.

All six of these countries, Pan points out, do have some form of ESG disclosure required and the governments have guidelines to help companies in their ESG disclosures; all the nations have stock exchanges that are members of the Sustainable Stock Exchange Initiative to encourage ESG reporting by listed companies.

He points out the nature of the ESG disclosure regimes of the six nations in another Top Story selection this week.

Sustainability Reporting:  The Global Reporting Initiative (GRI) is the world leader in number of corporate reports published following the organization’s standards; while some ESG standards are designed to inform the investment community, GRI’s were developed over 30-plus years with stakeholders in mind, including providers of capital (today’s standards were preceded by GRI’s reporting frameworks, “G1 through G4”).

GRI in our third Top Story this week reports growing momentum for sustainability reporting in South Asia and especially for three target countries (India, Bangladesh, Sri Lanka).

GRI’s research examined 1,100 companies in the region; of these, 503 are in India, 320 in Bangladesh, and 284 in Sri Lanka.

The “2020 Sustainable Reporting Trends in South Asia” research found that GRI’s Standards are the most widely-used for ESG reporting across all the countries; 64% of listed companies in Sri Lanka use the standards; the number of reports published in Bangladesh increase by more than a third from 2018 to 2019; in India, 99% of organizations analyzed by GRI have integrated sustainability reporting into their management practices.

While the usual flow of content that we monitor and share in the newsletter each week at times has a focus on Asia and the Pacific Basin region and subregions, we are bringing you much more detail in these stories – where you will find more information about the above research efforts and respective organizations’ reports in the Top Stories.

TOP STORIES

Imagine the Power to Address Climate Change As the Pope & Roman Catholic Church Focuses on Sustainability

by Hank Boerner – Chairman, G&A Institute

Imagine the impact — the power of the organizational resources directed at climate change issues — as the global Roman Catholic Church focuses on the issues. In 2915, the new year, the global church could become the major “game changer” on the issue.

There is a new Holy Father in place — Pope Francis, who took office in a little bit less than two years ago. He has shaken things up in the Roman Curia (the important headquarters infrastructure in Rome/Vatican City) and is sending strong signals to the faithful on all continents.

Among those messages:  we are the stewards of the natural world and have moral and spiritual responsibilities in that regard.

The buzz is that a powerful message will be coming from Pope Francis this spring, in the form of an encyclical, the traditional way that important and “highest” teachings are communicated to the faithful worldwide.

Photo: USCCB

The resources of the church are immense and global: 1.2 million faithful around the world, 75 million alone in the United States; 5,000 bishops; 400,000 priests; newspapers; radio and TV stations; web sites; hundreds of orders; universities & colleges…and more.

Thinking of impact in capital markets:  Many Roman Catholic orders are members of a powerful institutional investor activist coalition — Interfaith Center on Corporate Responsibility (ICCR), which engages with public companies to address issues of concern.  Including uppermost in mind, climate change.

If these and other resources are brought to bear on climate change issues, think of this as the game changer for the global discussion on the subject.

We have strong hints now at the direction to be taken by Pope Francis and the church he leads.  Here are some things to consider as we enter 2015.

In late December, Amy Goodman of Democracy Now, shared her views on the church’s anticipated moves. “Pope Francis,” she posited, “is about to make history by issuing the first-ever comprehensive Vatican teachings on climate change, which will urge 1.2 billion worldwide to take action…”

Ms. Goodman interviewed author and Vatican expert Austin Ivereigh (co-founder of Catholic Voices), who has just published the biography, “The Great Reformer: Francis and the Making of a Radical Pope.”  Mr. Ivereigh said that the encyclical will address the science underlying arguments for policy changes and actions to be taken.

As backdrop, in May 2014, two “Pontifical academies” that are part of the Vatican mechanisms — The Academy of Sciences, and the Academy of Social Sciences — conducted a joint workshop and in effect convened a summit in Rome to discuss “Sustainability Humanity, Sustainable Nature”  Our Responsibility;”

The gathering explored economic growth and the impact on natural resources (“natural capital”).  And, the gap between rich and poor and the impact of economic growth on emerging economies, urban pollution, the growth of poverty, and other issues. (Among participants:  Jeffrey Sachs of Columbia University Earth Institute.)

The intent of the workshop was to view “Humanity’s interchanges with Nature through a triplet of fundamental, inter-related Human needs — Food, Health, Energy.\

The Papacy is a powerful bully pulpit for addressing societal issues and bringing the considerable resources of the Roman Catholic resources (spiritual, economic, diplomatic, persuasive) to bear. And Pope Francis is a logical messenger on the issue. Thank about his background and personal resources.

He was trained as a chemical technician in his homeland, Argentina. He chose the priesthood, entering the Society of Jesus (the Jesuits, who run universities worldwide). Ordained in 1969, he continued his studies, on to the doctorate in Germany. He taught philosophy in university.

His personal motto is miserando atque eligendo, chosen when he was first a bishop — meaning “lowly but chosen;” in Latin. He was appointed archbishop, then cardinal, and in March 2013 Jorge Mario Bergoglio was elected Pope — the first from the Americas.

As priest – bishop – archbishop – parish priest – teacher – cardinal — Francis has been focused on serving the poor, social justice, the authenticity of the church in matters of faith and morals, and the need for humankind to be stewards of nature. He took the name Francis noting the inspiration of St. Francis of Assisi, the great spiritual leader and protector of nature.

Biographer Ivereigh, who presumably has his necessary contacts in the Curia, predicts Pope Francis will issue his “climate change” encyclical in March.  The Holy Father is scheduled to visit Sri Lanka and The Philippines — both of which suffered great damage and human loss in recent storms that many experts attributed (the intensity) to climate change..

Topics to be included may be deforestation (a system that encourages to much inequality), And “consumerism,” which encourages damage to the environment.

Consider this:  the foundation of the document is predicted to be [that] the scientific consensus is that climate change is real…and momentum if needed to bring about action to address the challenges.

And then we should consider the impact / outcome of the enormous resources of the global Roman Catholic Church and all of its communication organs (including parish pulpits) are brought to bear on climate change issues.  With Pope Francis on point, corralling other religious, governmental and NGO communities to join his 21st Century crusade.

We’ll be watching – this will be a game changer, for sure.

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To see Amy Goodman report:  http://m.democracynow.org/stories/14898