How Companies in Asia can Embrace Sustainability
Leaders today operate in a global, complex, uncertain and interconnected world. Simultaneously, they are tasked to lead in an age that demands social justice, and inclusion and diversity in business. Sustainability has altered the shareholder mandate for companies to make positive contributions to society as a strategic imperative of business success.
Universally, despite concerns that momentum around the sustainability agenda may have peaked, Asia is beginning to increase its focus on building enduring and sustainable businesses. Organisations in the region are being stimulated into action due to the pressing need to address social issues and environmental degradation; Regional connectedness with countries, governments, corporates and civil society managing these issues together; and an opportunity to lead. Research from the National University of Singapore reports that companies proactively reporting on sustainability, experience a positive uplift in market value. Organisations in Asia that act now have the opportunity to establish a reputation as pioneers in advancing the agenda in the region.
How do companies integrate sustainability?
With business in Asia ripe for sustainability, companies need to look at how they can embed the agenda into their strategy. Following interviews by Human Capital Leadership Institute with leading international brands, including Unilever, Singtel, Mastercard and DBS, four universal truths emerged that support the integration into organisational strategy and manage the subsequent transformation:
Belief in Doing Well Doing Good - companies must have genuine intent to do business in a way that delivers commercial success and ensures a positive contribution to society. The Doing Well, Doing Good agenda cannot be an adjunct to the core business but fully merged into the strategy, as well as every policy, process and procedure. To do this, companies need to ask themselves:
- What is the core of the organisation?
- What are the stories that employees recall with pride?
- When has the company been at its best, what does it stand for?
- What is the mindset of the organisation?
- Is investment in building a business that both does well and good seen as an integral part of the strategy and does it add commercial value to the organisation?
“Singtel turned 140 years in 2019, and we have also successfully expanded regionally and in our portfolio of global businesses. We believe this success has come from our ability to establish our social license to operate and create value for the local economies and communities we have operated in.”
- Aileen Tan, Group CHRO, Singtel
Public Commitment - setting tangible and measurable targets with accountability illustrates a companies' responsibility to the cause and must be communicated both internally and externally. To do this, businesses need to:
- Translate their Doing Well and Doing Good strategy into clear targets and measures
- Ensure key business units and functions incorporate these measures in their objectives
- Have a transparent process in place for sharing progress and measuring performance
“When you measure the commitments, and when it is the global COO asking the questions, people see that you are serious! “
- Amita Chaudhury, Director, Sustainable Business
Relentless Focus – the CEO, Board and leadership team should be wholly committed to Doing Well, Doing Good and instrumental in the continued motivation of the agenda across the whole organisation. Business can achieve this by:
- Understanding whether senior leaders are committed to the Doing Well and Doing Good agenda
- Pledging to invest in financial and physical resources to ensure capacity and capability in driving the agenda
- Establishing a process for sharing progress and measuring performance
Learning from Others – this is integral to the process. Progression is accelerated if a learning ecosystem is established, which encourages collaboration of both internal and external stakeholders. To create this system, business need to:
- Put mechanisms in place that support listening
- Test assumptions to assess whether customers, employees, activists view things equally
- Actively search for those you can learn from and request for help and advice
The Inhibitors of the Doing Well and Doing Good agenda
Despite momentum growing in Asia and companies understanding the four universal truths, being in a position to take action is not always easy, despite the apparent opportunities. There are two key factors that businesses need to understand before they embark on their sustainability journey.
- Economics - for most Asian-based customers and consumers, price is a key differentiator. With many unwilling to pay more for a product or service, regardless of its positive impact, companies in the region must deviate from a culture of maximising short-term growth and profits, and become more innovative in delivering more for less.
- Sustainability - despite a history of Doing Good across Asia, the challenge arises from building a mindset that also incorporates the Doing Well aspect. In the past, organisations have been reluctant to link the Doing Good mandate with commercial success and see it as too structured and formal. For companies to be successful, they need to ensure that sustainability is not only incorporated into their mission and values, and external communications, but also combining it thoroughly into their supply chain or budgeting process. It must be embedded across every operational aspect, team, policy and procedure of the organisation.
With so few Asia-origin companies to date in the global listings that recognise company achievements in building a sustainable business, the opportunities in the region are immense. Businesses may initially face significant social and environmental challenges. Still, once they manage to re-position their narrative as a force for good and establish governance structures, it will create a blueprint for other organisations to follow. For companies in Asia to survive and flourish long term, it makes business sense for them to support, implement and accelerate a sustainable Doing Well, Doing Good agenda.