Compassion, Inclusion, Trust: Leading a Just Transition
We invited three inspiring women to discuss how entrepreneurs and individuals can have a positive impact on Asia’s transition to a more sustainable future.
As environmental, social and governance (ESG) issues gain more attention across Asia Pacific, the lines between corporate responsibility, sustainability and philanthropy are becoming increasingly blurred.
Companies and investors now see their impact on society as a key part of doing business, according to Eleonore Dachicourt, Head of Sustainable and Responsible Investments, South East Asia at BNP Paribas.
Speaking at the Singapore leg of BNP Paribas’s seventh annual Sustainable Future Forum, Dachicourt said the trend towards a more holistic approach to ESG presented more opportunities for individuals and investors to make a positive impact.
“We are moving away from a traditional corporate social responsibility (CSR) model to a Responsible Social Corporations one,” said Eleonore.
“ESG considerations will be more and more at the heart of the way businesses are run. It’s about doing better business for consumers, employees, shareholders, stakeholders and investors.”
Lynna Chandra, founder of Indonesia’s Rachel House hospice for terminally ill children, believes that others can also make a social impact by “bringing humanity back into their work”.
Chandra started her career in investment banking – but a profound personal experience changed the course of her life forever.
“Rachel House is named after a friend of mine who suffered from cancer,” she recalled. “After she died, I wondered how families without her financial means could manage with a terminal illness,” said Chandra.
Chandra believes that a similar change of mindset is now under way in many businesses as stakeholders, employees and customers push for a greater sense of purpose.
“The old CSR model is inadequate and this multi-jurisdictional purposeful business model is more effective,” said Chandra. “We will never be able to build a purpose-led organisation unless we know what our own purpose is.”
Cherie Nursalim, Vice Chair of diversified real estate and manufacturing conglomerate Giti Group, also believes that individual action is important.
“Each of us has an opportunity to fix the wrongs we see in the world,” she said.
As Co-Founder of the United in Diversity Foundation and Special Advisor on Climate to the Government of Indonesia, Nursalim knows that good work is being done – but more can be achieved.
She argues that the power to influence change is amplified when business gets involved.
“The business sector has a key role to play because we have US$290 trillion of assets,” she added.
What’s missing, she said, is greater coordination to ensure that civil society, NGOs (non-governmental organisation), academia, governments and businesses are all working together to mobilise the US$5 to US$7 trillion required annually to meet the UN Sustainable Development Goals.
“Meeting this bill requires cooperation across the private and public sectors,” she said. “The only way is to crowd-in private sector funding, and blended finance offers a method of structuring so that you can bring in government or public money – and we can also invite philanthropic funding.”
The Monetary Authority of Singapore and others have endorsed blended finance solutions as a tool for net zero.
“We applaud the MAS for organising a blended finance plan,” said Nursalim. “And the Government of Indonesia has not only championed a roadmap on blended finance but also created the SDG Indonesia One fund, which received US$3 billion in commitments and implemented US$1 billion dollars of concrete projects.”
The power of this cooperative approach is starting to produce results. Nursalim cited a number of examples.
“We had very good news that the US$20 billion Green Climate Fund will support Blue Halo in Indonesia by giving grants and giving up facilities or loss guarantees as a system-shift solution to save our oceans,” she said.
Nursalim noted that in the social arena, the UN Secretary General had just announced a blended finance vehicle, the International Financial Facility for Education (IFFEd).
“This is a US$10 billion facility with a structure where 15 cents can be leveraged to US$4 in supporting education,” she explained.
With the 15-16 November G20 meeting in Bali close at hand, Nursalim is optimistic that the cooperative approach to problem-solving and finance via blended solutions will catch on.
“Indonesia is in the presidency this year and we expect a new international blended finance organisation will be launched as a highlight of this G20,” she said.
Leaving no one behind
Climate action dominates the list of ESG initiatives, both for companies and for individual investors. However, there is a growing awareness that the response to the climate crisis must be fair and inclusive.
Teresa Koh, China Chairman at global law firm Freshfields Bruckhaus Deringer, says the key to a just transition is greening the economy in a way that creates decent work opportunities and leaves no one behind.
“It's about maximising the social and economic opportunities of climate action – and the challenge is always on the how,” said Koh.
As a trustee of the International Accounting Standards Board (IASB), Koh helped launch the International Sustainability Standards Board (ISSB) at the UN COP26 climate conference in November 2021. This global initiative aims to create a harmonised standard for sustainability by bringing accounting standards and sustainability standards under the International Financial Reporting Standards (IFRS) Foundation.
“At last we can create the important connectivity between financial information and sustainability-related information,” Koh explained.
The ISSB is focusing on climate-related disclosures, but Koh regards this as just the beginning.
“We started with climate because it is urgent, but this year the ISSB will consult the market to decide on the next focus topics,” she said.
Business with purpose
These closer connections between ESG and corporate purpose are changing the way companies and entrepreneurs do business.
“Whether it be through their personal or professional life, managers are looking at how they can align their personal values with their work,” said Dachicourt. “The question is, how can you apply your values to create value?”
When it comes to really making a difference, there is no substitute for individual action.
“Just having the tone from the top won't work anymore, because you need to have buy-in at every level of an organisation,” said Koh. “Leaders have to be more cognisant of the need for inclusiveness through actions which inspire trust – otherwise there won't be real change.”