Southeast Asian firms top the charts globally for their bullish growth prospects as well as their sense of accountability for achieving the United Nations’ sustainability goals. However, commitment needs to be converted into practical action, according to HSBC.
The findings come from HSBC’s “Navigator: Now, next and how”, a survey of over 9,100 companies in 35 countries and territories, including the views of the key decision-makers in 2,299 businesses across Southeast Asia.
The survey reveals that 81 percent of companies in Southeast Asia are projecting business growth next year (higher than the global average of 79 percent). Additionally, 76 percent of surveyed Southeast Asian firms believe they have a role in delivering the United Nations’ Sustainable Development Goals (SDGs), compared to the global average of 63 percent.
The bullishness of Southeast Asian firms reflects the growth trajectory and favourable demographics of the region. Collectively, the 10 ASEAN countries’ combined GDP stood at almost US$3 trillion in 2018 - more than the UK, France or India, and the region has enjoyed five-percent growth rates over several years.
However, the case for sustainable development across Southeast Asia is irrefutable given the region is increasingly and disproportionately exposed to climate change. For example, Lloyd’s estimates that US$22.5 billion of GDP is at risk from flooding in Southeast Asian cities alone. If left unaddressed, the Asian Development Bank forecasts that climate change could reduce Southeast Asia’s GDP by 11 percent by the end of the century.
Matthew Lobner, head of International and head of Strategy and Planning, Asia-Pacific, HSBC, says, “ASEAN is home to some of the world’s most bullish businesses – and these high-growth firms are acutely aware that sustainability and commercial goals go hand in hand. It’s very pleasing to see the sense of focus that Southeast Asian firms have towards the UN’s SDGs but must now convert from desire into meaningful action. As investors and governments increase their focus on sustainability, firms need to be focusing on this now.”
Suggested action plans for firms to drive the sustainability agenda
HSBC has compiled the following suggestions for how firms can progressively include sustainability as part of its strategy
1. Think short-term and long-term: Decisions made today impact the future. Climate change impacts are systemic, all-encompassing, and here to stay.
2. Think holistic: Review everything from electricity usage and property portfolios, to where you source materials and how you package and ship products, to operational preparedness. This means engaging with all layers of your organization and embedding green and social issues into your business and investment decision-making.
3. Think global: Melting glaciers and rising sea levels are not just bad news for the inhabitants of Greenland or Tuvalu. They have direct and indirect global implications, particularly in today’s interconnected world.
4. Stay up to date: Technological changes and green innovations could put more low-carbon alternatives within your reach. Stay abreast of the regulatory environment, sustainable financing options and evolving investor and customer expectations. You may find that climate-friendly action will lift – not drag down -- your profits and reputation.
5. Act now and lead by example: Business strategies and products can’t be shifted overnight – early action is key.
Tony Cripps, HSBC Singapore’s CEO, HSBC, says, “Sustainability is intrinsic to driving value and helping to secure the long-term viability of businesses, and failure to act now could severely hamper Singapore’s growth opportunity. While encouraging progress has been made, the next five years are a critical timeframe for businesses to ensure that sustainability is embedded throughout their whole business and that of their value chain.”