Moving from sustainability ambition to impact 

AT THE 27th United Nations Climate Change Conference in November, the global community stood witness to important discussions reiterating the need for collective effort, concerted action, and effective implementation to avert climate disaster. As we move into the new year, these conversations will continue to drive the decisions of governments and businesses alike.

After all, we have certainly made strides forward in the past years. Only a decade ago, many around the world doubted the reality of global warming and some even questioned if efforts to tackle climate change were worth pursuing at all. Yet, the world remains far from a net-zero emissions trajectory. Even if all countries honoured their respective Paris Accord commitments, carbon emissions would only see a reduction of 7.5 per cent in 2030.

With today’s emissions trajectory proving unsustainable, this makes 2020 to 2030 a critical period to push the envelope on decarbonisation to drive an impact that steers the course away from climate destruction.

Critical region for climate success

Asia is home to more than half of the global population, and it accounts for half of the world’s greenhouse gas emissions. The continent is also on an accelerated journey to urbanisation – it is the region with the highest percentage increase in urban population over the last two decades.

These rapid changes have had cascading effects on the environment, driven by new energy demands to sustain Asia’s growing urban population. At present, nearly 85 per cent of the energy consumed in Asia already comes from fossil fuels, and this demand for energy is projected to double in 2030. It is unsurprising then that a significant effort to combat climate change must be driven here. However, insufficient renewable energy installed capacity, complex policy landscapes, and different levels of economic development in the region make it a challenging journey ahead.

While governments and regulatory authorities have outlined the path to net zero with commitments on both national and regional levels, building a greener and more sustainable region cannot be a responsibility borne by them alone. This is a growing mandate that businesses are all too aware of, but one that they struggle to meet.

Unpacking the sustainability gap

Overall, the challenge that plagues businesses throughout Southeast Asia is that sustainability is far from embedded within organisational processes. This stems from sustainability having only evolved to be a business priority in recent years. With that, four key challenges have emerged: the lack of a clear strategy, ineffective goal-setting, lack of data visibility, and dearth of leadership to drive results through.

It is certainly laudable that three in five Asia Pacific businesses today already have a clearly communicated sustainability strategy. Yet, implementation of these strategies has proven challenging. A recent survey conducted by Oxford Economics found that just 20 per cent of business leaders have been incentivised by the success of sustainability strategies, and less than half of the businesses’ employees are active participants. Therein lies the gap: businesses do not have their employees’ buy-in, and without collective efforts across the organisation, it will be difficult to deliver against the organisation’s sustainability goals.

A closer look at the goals set by businesses often reveals ambitious and challenging ones that are set far in the future – exceeding most executives’ planned tenures at their company. Furthermore, these goals typically consider sustainability as a checkbox to tick rather than involving the recalibration of processes to drive impacts that truly have value. One way businesses can do that is by expanding their focus beyond investments in pure green technologies, transitioning to progressively decarbonise across their entire value chain. This requires two things: the data to measure, evaluate and drive progress, as well as the right leadership to lead the charge.

Critical role of data for success at the green line

After all, data is not simply a nice-to-have but critical for success at the green line. At present, businesses may often lack the visibility and insights needed to green their processes and make sustainable investments. For instance, resources may be consistently rechannelled owing to logistical changes – especially amidst the global supply disruption that has persisted since the pandemic. With siloed reporting across various business units, organisations are inevitably left with inaccurate numbers that prevent them from making the changes needed to make a tangible impact on the green line. Unsurprisingly then, closing the sustainability gap is intricately tied with gaining data visibility across the organisation.

Indeed, ineffective data has posed a challenge to more than 77 per cent of Asia Pacific businesses; just 15 per cent have managed to measure their total organisational carbon output, according to data from the same recent survey. Businesses often lack data visibility into their product supply chain – from production, material sourcing, to transport. With that, businesses lack the ability to include and embed exchange emissions data into their line-of-business applications, including procurement, travel, and expense, to help achieve complete ESG transparency, so they are empowered to act and take action to move forward on their sustainability ambitions.

Furthermore, the lack of leadership has also proven obstructive to businesses’ sustainability journeys. The proof is in the numbers: businesses risk losing trust of their employees in their strategies when sustainability plans are poorly put into effect. At present, Asia Pacific businesses are largely driven by regulatory compliance alone, which can be a major inhibitor in the long run given that compliance should be the bare minimum met. Harnessing the support of both leadership and employees on the ground will be critical to turning ambition into action.

Synergy is crucial to meet the green line

Accelerating action to combat climate change necessitates intelligent, sustainable enterprises in the Asia Pacific ecosystem alongside the necessary policies, funding support, and regulatory framework to guide the transition to a greener economy. Singapore already leads the way for countries in the region. The nation’s approach of tri-sector collaboration has encompassed introducing policies to drive the adoption of green technologies through funding grants, furthering innovation of deep technologies to reduce carbon impact through incubator programmes, and deepening industry partnerships with enterprise labs to tap on-field expertise.

Yet, such efforts will only bear fruit with equal commitment from businesses. For one, developing the necessary talent in the ESG sector will require businesses to feed investment into honing talent here. Singapore has had to draw on foreign talent to plug this gap, but this will not be sustainable in the long run. While the government has embarked on skills upgrading initiatives as well as efforts to grow its own local talent pool here, the runway to net zero is a short one. With the demand for talent far outstripping supply, business partnerships with tertiary institutions will be essential to developing the necessary talent for Singapore to meet the green line.

The reality is that each business – empowered with the right tools – can have an impact in changing climate concern into climate action; this is, however, a mandate they must accept. That impact may seem miniscule, even at the level of each business, but when multiplied, can make or break our society. Especially now, there is no time to waste for businesses to move beyond intention into driving true impact. With survivability on the line, climate success would undeniably be success for us all.

The writer is global vice president, strategy and sustainability engineering, at SAP