Businesses in APAC are unsure about implementing sustainability practices, study finds
Businesses in the Asia Pacific are slow to appoint a dedicated sustainability lead and take very different approaches in terms of what practices to implement and how aggressively to implement them.
Of the large APAC firms Forrester analyzed, 41% have set a date by which they will attain carbon neutrality
This is due to government policies and positions being wildly inconsistent, creating confusion and giving many firms cover to delay taking desperately needed action.
Among the large APAC firms analyzed by Forrester in its “The State of Environmental Sustainability Among Large Organizations In Asia Pacific” study, 33% have created a position for a director, vice president, or executive to lead the sustainability program, compared with 58% among the Fortune Global 200.
For example, state-owned Petronas, Malaysia’s largest oil and gas producer, appointed a chief sustainability officer in June 2021.
The role is critical, according to the study, as this individual leads the team that plans, executes, and monitors corporate sustainability initiatives that contribute to the financial and strategic objectives of the business.
What are the study’s findings?
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While only 33% have named a sustainability lead, 53% of the APAC firms Forrester analyzed have established a target date for the partial or total elimination of greenhouse gas (GHG) emissions, consistent with the global average of 55%.
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Most use the GHG Protocol Corporate Standard to measure and manage GHGs and incremental targets to achieve shorter-term goals and communicate progress transparently. Japan Post Holdings will reduce 46% of its scope 1 and 2 emissions by 2030 on its path to becoming carbon-neutral by 2050.
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Of the large APAC firms Forrester analyzed, 41% have set a date by which they will attain carbon neutrality — that is, when they will achieve net-zero carbon emissions, typically via a combination of generating less CO2 across their operations and compensating for the CO2 they do generate by purchasing carbon offsets.
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Most are either targeting 2050 (in line with the goals of the Paris Agreement) or 2060, the date set by China. The APAC number is significantly higher than the global average of 23% among the Fortune Global 200.
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Six of the APAC firms Forrester analyzed have either already achieved carbon neutrality (mainly through carbon offsets) or expect to do so in 2022; nine have committed to doing so by 2030.
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National Australia Bank (NAB) was the earliest to achieve carbon neutrality, having met this goal in 2010.
What are the study’s predictions?
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Over the coming years, sustainability will become a top priority for chief executive officers. Their ability to transform their firm is critical to surviving and capitalizing on a new wave of business disruption.
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Traditional firms will need to start their transformation journey toward sustainability by embracing three key principles: bold leadership, sustainable execution, and aligned stakeholders.
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Chief sustainability officers set the sustainability vision, drive organizational change, and embed a sustainability strategy into the core business model. However, different firms require different types of CSOs to drive such significant transformation.
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Forrester has identified four types: Activist, Influencer, Politician, and Tenured.
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In Forrester’s March 2021 Global Trust Imperative Survey, 46% of US online adults, 77% in India, 63% in Singapore, and 52% in the UK and France, said they believe that brands should take a stand on climate change.
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This pressure, in turn, causes firms to “walk the talk” and act on their pledge to protect the environment. When implemented correctly, a firm’s sustainability efforts will build trust, increase resilience, and open new markets.
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With Cop26 promising new regulations and renewed impetus on global climate action, climate change disclosure will become commonplace for firms worldwide.