Advance Blog

March 29, 2018
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Addressing environmental and social issues for long-term business success in ASEAN

By Michael Waters, International Water and Environmental Consultant

ASEAN is one of the most environmentally diverse regions on Earth with an astonishing level of biodiversity on land and in the seas. Corresponding to biodiversity, the 10 member countries of ASEAN exhibit a rich social diversity with countless languages, music, art, architecture, histories and traditions, many of which resonate strongly with local ecological landscapes.

With this diversity comes a host of environmental and social challenges including population growth, income disparity, climate change, air and water pollution, corruption, social conflict, transport, energy and transboundary issues to name but a few. Considering this incredible diversity and the corresponding challenges, companies seeking to do business in ASEAN would do well to consider how to address environmental and social issues to survive and thrive in the long term.

Despite these complexities, each of the ASEAN countries now has well formulated policies describing how environmental and social issues should be addressed by the corporate sector. In particular, as is common worldwide, all countries of the region have well-developed frameworks requiring that Environmental and Social Impact Assessments be conducted and approved by an independent government agency prior to starting up any development project.

There has long been a tendency by some in the corporate sector to view environmental and social related requirements as another level of red tape ‘getting in the way’ of business. There are also many examples of business failures when social and environmental issues were not given due consideration. These risks are particularly high during the early stages of any new business venture. A parallel can be seen when construction begins on a building site. Work on the foundations is seldom appreciated architecturally but the foundations must be successfully completed before work above ground can safely commence, otherwise there is a high risk of the building collapsing. Similarly, taking a careful, well-considered approach to environmental and social issues from the earliest stages of a business venture is critical to ensuring a project is considered acceptable by stakeholders such as the local community.

There is now a significant body of literature at the international level providing guidance to the private sector on how environmental and social issues can be addressed, such as the Equator Principles and the Environmental Management Standard Guidelines (ISO14001). Guidance documents for specific sectors are becoming increasingly well-developed such as the Equator Principles for the Finance Sector and the Seven Strategic Priorities of the World Commission on Dams for the Water Resources Sector.

From these sources and from my personal experience over 17 years working in ASEAN, here is my checklist of points for people and organisations who want to address business sustainability when working in the region:

  • Examine the priorities for your business in global terms: In the long term, a healthy happy planet leads to healthy happy people and both of these lead to healthy happy profits. There is ample evidence for this this and taking active steps to align business objectives accordingly will help ensures your business will thrive in the long term.
  • Be passionate about environmental and social issues and wear this passion as a badge of honour. Seek to embed positive thinking on environmental and social issues throughout your organisation.
  • Develop and support a corporate culture within your business that helps staff balance your internal business imperative to make a profit with external environmental and social imperatives. Help all within the organisation realise the importance of environmental and social issues by embedding environmental and socially related goals into employee incentive schemes, criteria for promotions, bonuses and so on.
  • Develop a sensitivity to how your business will be perceived by stakeholders. Within a corporate setting, the internal perception of a business opportunity will naturally focus on the financial opportunity it will bring to the business owners. However, for other stakeholders the benefits it brings or the challenges it places on local communities and other stakeholders will be paramount.
  • Transparency: Always be proactive and take steps to keep stakeholders up to date with new developments in your business that may affect them.
  • All the countries in ASEAN have now seen a significant number of both successful and unsuccessful international business initiatives come and go. Consider the track record of other international business initiatives that have been developed previously in similar parts of the region and judge what their strategies for success have been. Have their track records matched their ambitions?
  • Engage with a wide range of Non-government Organisations and Civil Service Organisations down to the lowest possible level at the location where you intend to do business. Don’t be surprised to find that many will be supportive of your business as they may see significant potential benefits to their members.
  • Support existing skills transfer programs and other partnerships with the local community. Identify locally important environmental and social ventures and show support for those.
  • Set short term environmental and social objectives to demonstrate you take these issues seriously. Also, set long-term objectives to demonstrate long-term commitment.
  • Collect data and document your sustainability efforts thoroughly as you would for any other important aspect of your business.
  • Respect local values.
  • Provide opportunities for locals.
  • Have a meaningful, authentic Corporate Social Responsibility policy in your organisation and ensure alignment between business practices across all sectors of the business.
  • Accept that differences in environmental conditions and social diversity are inevitable. Issues that have in the past been neglected and groups that have been disadvantaged may require special attention.

For many years, foreign investment in ASEAN has been an important means of stimulating economic growth and is expected to remain so for the foreseeable future. With ASEAN’s continued good economic growth, there are ample business opportunities for international firms within the region that effectively address environmental and social issues. By engaging meaningfully with local partners to create opportunities for local stakeholders, your business can expect to receive a warm welcome and reap significant long-term benefits.

Michael Waters, International Water and Environmental Consultant
With a PhD in Environmental Engineeering from the University of New South Wales, Dr Michael Waters has more than 25 years of experience in environmental and water resources management.  He first became involved in environmental and water management in ASEAN in 2001 through a water supply cooperative project with the Asian Institute of Technology in Bangkok and has subsequently worked widely throughout ASEAN including numerous projects in Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore and Viet Nam.

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