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Delivering on COP21 and the global goals in the world’s most populous region calls for breakthrough partnerships
The quest for global sustainability will be won – or lost – in Asia. Home to six of the world’s most highly populated economies and nearly half of the world’s megacities, Asia Pacific accounted for more than half of the world’s population in 2015, according to the Asian Development Bank. It is an incredibly diverse region, encompassing countries from Pakistan, China and Cambodia to Vanuatu, Indonesia and New Zealand.
The region now consumes more than 40% of the world’s energy – yet nearly a quarter of its people still live in poverty. Although the pace of growth across the region as a whole did slow this year, six out of the top 10 of Bloomberg’s 20 fastest-growing economies in 2015 were in Asia – and south Asia was named by the World Bank as the fastest-growing region in the world.
Continuing to grow while meeting its huge development challenges puts rising pressure on an already strained environment. And as if that weren’t challenge enough, Asia Pacific is also the region of the world most vulnerable to natural disasters. So when it comes to delivering on two of 2015’s most important sustainability milestones – the Paris Agreement and the 2030 Agenda, the scale of the challenge is huge.
In its recent report Tracking the Trends, CSR Asia, a Hong-Kong-based consultancy working to build capacity and spread best practice in the region, highlights 10 sustainable business challenges and opportunities – tackling climate change and the Sustainable Development Goals (SDGs), supply chain, labour issues and human rights, water and food scarcity, gender equality, governance, transparency and anti-corruption, and a growing income gap between rich and poor.
Asian countries all face broadly the same issues, says Mara Chiorean, CSR Asia executive director. What differs is how governments prioritise and address them.
Momentum on climate
This year business played a far more proactive role in the climate agenda. “2015 has been a critical year for sustainable development and, in particular, future global action on climate change,” says Andrew Petersen, CEO of Sustainable Business Australia (SBA), a CEO-led not-for-profit group driving awareness, action and advocacy on the Australian business role in sustainable development. Both at COP21, and during the development of the SDGs launched by the United Nations in September 2015, “business has been a connected and collaborative stakeholder”.
More than 30 major Australian companies have signed key climate leadership commitments developed by CDP (formerly known as the carbon Disclosure Project) and We Mean Business – including Westpac, Infigen Energy and Local Government Super. Australia's largest private owner, operator and developer of renewable energy assets, AGL Energy, endorsed major climate commitments. And the creation of the Australian Climate Roundtable and launch of the Australian CEO Guide on Climate Action are strong signals that the climate agenda finally entered mainstream business down under.
It’s a theme repeated across the region. COP21 is a game-changer, according to Kaveh Zahedi, representative of the UNEP Regional Office for Asia Pacific. “Developed and developing countries agreed on one ambitious climate deal. That buy-in is unprecedented and the aspiration towards 1.5ºC is fundamental for the Pacific island countries.”
Zahedi says the agreement sends a very strong signal to innovators in the private sector that the energy landscape needs to change. Business will now bring on stream the technology that can turn the COP21 vision into reality. “COP21 signals the end of the fossil fuel era. Anyone who holds onto to it is swimming against the tide of history.”
Coming fresh from the Paris euphoria, Zahedi sees tackling climate change and enhancing resilience as top priorities. “We have to reduce vulnerability,” he says. “Asia Pacific is the most disaster-prone region in the world – we experience the biggest impact of flooding and extreme weather events and each of these events undermines development gains.”
For Ciara Shannon, director at Eden Ventures, and Asia Coordinator for Our Voices, an NGO working to galvanise faiths around the world on climate change, one of the most significant Asia Pacific contributions to the Paris agreement was the push for 1.5ºC and “loss and damage” to be included in the text. Under remarkable leadership from the Marshall Islands and other small Pacific nations, the High Ambition Alliance noticeably ratcheted up the level of ambition at the talks. A large part of this success, Shannon believes, came from good storytelling: “COP21 was very creative, very different to Copenhagen.” Videos from places such as Kiribati made a powerful moral case for strong action on climate change that no negotiator could ignore. Leadership from China also played a positive role.
The challenge for countries – and companies – from 2016 is to work out what the climate commitments and SDGs mean in practice. “The biggest obstacle proactive companies face,” says SBA’s Petersen, “is the creation of long-term policy signals to give business the confidence to take up the heavy lifting of innovation and investment.” For Asia Pacific to meet the SDGs and 2030 agenda, investment in the region of $2-3 trillion per year will be needed – an extraordinary sum. “A top priority is changing the rules and redirecting finance so that it matches and starts to fund the 2030 agenda,” says UNEP’s Zahedi. “We need to ask whether our frameworks actually promote investment in the future that governments have agreed to.”
UNEP is helping countries in the region to green their stock exchanges, access finance and tap into green climate funds to reduce their vulnerability to climate change. “We also want to help them decouple growth from resource use and environmental degradation,” says Zahedi. “Asia Pacific is about three times less efficient than the rest of the world per unit of GDP, so there are clear economic and social benefits – including keeping Asia Pacific competitive.”
Clearing the air
Nowhere is that decoupling of growth and pollution more urgent than for Asia’s air quality. A study of 31 of China’s mainland cities by Greenpeace and Peking University recently found that air pollution was a bigger killer in China than smoking. Throughout 2015, images of masked citizens swathed in smog in China’s biggest cities became an almost daily sight. In March, a documentary about pollution by Chai Jing called Under the Dome went viral, provoking a social media storm over health concerns surrounding particulate matter. Recently, during the Paris talks, a “red alert” was triggered in Beijing, closing schools, factories and construction sites as official air quality ratings reached “heavily polluted”. And local restaurants and bars have earned ire and admiration for trying to charge “air purification fees” and lowering the price of beer to tempt people in when air quality plummets.
To tackle its urban air pollution, China has pledged to close a number of coal-fired power stations over the next three years and has committed both to peaking its GHG emissions and deriving 20% of its energy needs from renewables by 2030. But it will need to do much more to clear the air and rebuild trust with citizens increasingly concerned for their health and empowered with data from air quality monitors like the Laser Egg and smartphone apps like Azure Map.
The problem continues continent-wide. In Indonesia, fires from illegal clearing of 2m hectares of land resulted in transboundary haze affecting both neighbouring Singapore and Malaysia for weeks. In an interesting flexing of market muscle, Asia Pulp & Paper (APP) lost its Green Label certification from the Singapore Environment Council and saw its products stripped from the shelves of Singapore’s biggest supermarket chain NTUC FairPrice when the company was found to have been involved in causing the forest fires. Members of the Association of Banks in Singapore also announced they were reviewing ethical lending practices to reduce the risk of potential losses from companies involved in the fires.
At the Global Landscapes Forum, APP recently announced the launch of a new direct funding platform for rainforest protection and a landscape management framework for South Sumatra. A public/private alliance of Indonesian central and provincial government, civil society, local communities and the private sector, the aim is to create a joined-up model for economic development and environmental protection across the region.
It’s a step in the right direction but across Asia in 2016 expect growing citizen activism to combat pollution. In Delhi – which claims the dubious honour of worst air quality in the world – a Supreme Court petition was launched in the names of three toddlers claiming that the city’s poor air quality violated their right to life. Nine out 10 of the world’s cities with the worst levels of PM2.5 – particulate matter – are found in India and Pakistan, and a recent WHO Global Burden of Disease report estimates that more than half a million premature deaths in India can be attributed to ambient air pollution.
To try to address the problem and encourage higher vehicle emission standards a “green tax” was recently imposed by India’s Chief Justice on trucks in Delhi, but it isn’t nearly enough. “We’re just not seeing the reversal we’d like to see,” says UNEP’s Zahedi. “The World Health Organisation estimates that 7 million people globally die prematurely because of indoor and outdoor pollution, 70% of these in the Asia Pacific region. It’s an emergency.”
Decarbonisation, according to Eden Ventures’ Shannon, is the way to go. “It has the co-benefit of reducing air pollution – and companies need to consider the negative health impacts of pollution,” she says. While there’s no doubt technology can go some way towards addressing the region’s air, water and food chain pollution problems, the challenge of cleaning Asia up is huge. Without tougher regulation and enforcement, any gains risk being outpaced by galloping growth and consumption.
A major 2015 milestone was the global review of progress against the eight Millennium Development Goals, established in 2000 to raise human development standards around the world. Asia Pacific made huge strides in reducing extreme poverty, promoting universal primary education and improving access to clean drinking water. Hunger and child and maternal mortality have also been reduced.
According the UN Human Development Index (HDI), every economy in Asia and the Pacific bar Turkmenistan and Uzbekistan improved its HDI score between 2000 and 2013 – with the greatest increases occurring in Timor-Leste, China, Afghanistan and Cambodia. But despite extreme poverty being halved, across Asia and the Pacific there are still 1.6 billion people living on $2 or less a day, the Asian Development Bank claims.
“Around the SDGs there’s a big drive to say we will leave no-one behind,” says UNEP’s Zahedi. “Out of a regional population of 4 billion, around 1.4 billion are still poor – and that doesn’t match an agenda that’s about leaving no-one behind.” Raising human development standards is something companies need to address head-on through their supply chains. “Each and every company has a supply chain. A key role for business is taking responsibility for this. It’s no longer good enough to understand just a small part of it,” Zahedi says.
Dreadful recent revelations in Thailand of human trafficking and modern slavery in the fisheries and seafood processing sectors have highlighted how much remains to be done by companies like Thai Union to really embed the UN Guiding Principles on Business and Human Rights. It reinforces how tightly migration, poor labour standards and human rights violations are intertwined in Asia with rampant corruption, poor governance and lack of education. Changing this requires concerted multi-stakeholder effort—and much more transparency in global value chains.
China’s crackdown on corruption this year has been encouraging, but Transparency International’s Corruption Perceptions Index 2014 shows there’s still a long way to go. Like improving health and safety, creating a business culture of transparency and integrity in Asia Pacific is a long-term goal. Especially with its many family-owned companies, openness has not generally been the norm in Asian business.
The most powerful way to increase corporate responsibility among Asian companies, according to CSR Europe’s Mara Chiorean, is to raise levels of awareness of the value it can bring. “CSR is still very much seen as a cost centre. You have to demonstrate what best practice looks like and start the conversations that move sustainability forwards.” As well as the multinationals like Coca Cola, Unilever and Nestlé that are doing great work, Chiorean points to Huawei, Swire Pacific group, Infosys, Tata and Mahindra. “A lot of the companies that are taking a leadership role are not listed, they are family-run, and they do it because of their founding values.” She looks forward to the rise of the Asian multinational in driving CSR across the region.
As well as the SDGs, new regional frameworks like the Association of South East Asian Nations (ASEAN) 2025 Kuala Lumpur Declaration set out a community blueprint for sustainable development and social responsibility in the region. Business can be a partner in realising this vision. CSR Asia recommends that companies review the ASEAN 2025 Vision to understand and map their material issues, engage with local government and other stakeholders and report against the blueprint.
Partnership with business is also at the heart of a revitalised commitment to achieving the MDGs (now SDGs) in the Pacific. The PRIF (The Pacific Region Infrastructure Facility) exists to enhance coordination between a group of organisations that includes, among others, The World Bank Group, European Union, Australian Department of Foreign Affairs and Trade and Asian Development Bank. PRIF is helping Pacific countries build capacity, develop National Infrastructure Investment Plans, and plan their own pipeline of investments in energy, transport, water, ICT, sanitation, waste management and climate resilience needed to fulfil Agenda 2030.
PRIF Secretariat Coordination Officer Jack Whelan sums up the Pacific development challenge eloquently: “You have a large number of small, low-lying states spread over a large area. Sustaining remote populations on a small landmass with high vulnerability to natural hazards and high resource costs is really difficult.”
The big difference with the SDGs is the pivotal role to be played by the private sector. Companies can help to fill development gaps through responsible core business activities and financing investment-ready projects. In May 2016, the world LPG Association will host a regional summit to explore how liquid petroleum gas could be taken up more effectively in the Pacific as a transitional fuel for off-grid applications such as cooking to avoid the worst health effects of wood and kerosene. “There’s also growing engagement with the local private sector to provide infrastructure maintenance services to help avoid the ‘Build-Neglect-Rebuild’ paradigm,” says Whelan.
Asia Pacific’s sustainability challenges are as complex, huge and varied as the region itself. Ensuring development pathways are sustainable is a colossal task—but one the world ignores at its peril. “If 2015 was the year of commitments, 2016 will be the year of implementation,” states SBA’s Andrew Petersen. It’s an encouraging note to close on. While so much remains to do in Asia Pacific, there are positive signs that a shift is underway to bring corporate responsibility and sustainability into the business mainstream.
And that’s something worth celebrating.