Can tech be the answer for the region’s woes with ESG data reporting?
As ESG becomes one of the top agendas this decade, ASEAN countries are increasingly using technology as the core of their efforts to reach net-zero. There have been major developments in ASEAN’s tech ecosystem as the region takes steps to reduce greenhouse gases and avert disaster and will drive the conversations around sustainability over the next decade. As one of the fastest-growing regional economies, South-east Asia has seen more than US$15 billion in green capital deployed since 2020. The tech industry in particular is collectively placing a renewed emphasis on various aspects of ESG, with most of the large players recommitting to, or updating, their frameworks.
A large and vital area where tech can have the biggest impact is in the reporting and accessing reliable data pertaining to ESG in the ASEAN region. An economic powerhouse with immense potential for growth, the region’s awareness of ESG and ESG reporting is still at the stage of infancy. The push to mitigate the impact of climate change requires large scale financing, with Southeast Asia alone estimated to need US$2 trillion of investments over the next 10 years, this opportunity is significant for investors and companies. However, many investors have been hampered by the lack of high quality data to make the right investment decisions. In ASEAN, businesses are engaged in ESG initiatives and sustainability reporting in accordance with local sustainability disclosure guidelines. These guidelines include Bursa Malaysia’s Sustainability Reporting Guide, Philippines’ Sustainability Reporting Guidelines for Publicly-Listed Companies, Singapore’s Sustainability Reporting Guide and etc. Technology can help with this lack of centralized ESG reporting standards. Digitalisation for centralised monitoring has supported transparency and engagement along with the availability of consistent and uniform data for stakeholders.
The problems most companies in Southeast Asia face with ESG reporting is a lack of centralized guidelines which leads to them not knowing how to report ESG data. Recently, over the last few years, there have been increasingly new tech driven solutions for this lack of centralized framework. These solutions include software to track and reduce company’s carbon emissions, platforms to decarbonize and optimize company’s operations, supply chain and investing, open-access platforms for impact data and so on. In Thailand, the local SEC is expected to revise its disclosure requirements for listed companies to include information on human rights practices and carbon emissions. In Singapore the central bank has launched Project Greenprint to address gaps in reporting and accessing reliable ESG data. In Malaysia, ranked as the world’s top Islamic fintech market, fintech companies focused on Islamic finance are seen holding the key to channel funding to small and mid-sized businesses and widen the financial inclusion net while prioritising sustainable development. As the share of data centres is expected to rise in ASEAN, Indonesia is making strides towards building green and sustainable data centres by leveraging seawater for cooling needs.
Companies in Southeast Asia, where ESG and impact have always been relegated to a lower priority, now face a world where the stakes are real and there is a requirement to adapt. ESG is fast becoming standardized and Reporting on impact and ESG needs to be done in a way that is quantifiable, clear, and up to the same standards being set globally. At the end of the day, investments and efforts in ESG and sustainability must and will contribute to business gains and outcomes. The fact is, in the region, this awareness around the value of environment, social and governance is just starting to pick up pace and organizations should probably look towards tech to help them not fall behind the curve and restrain their growth.
Kavita Panda is our Chief Operating Officer and Country Manager for India. Kavita was Executive Director of The Walt Disney Company India, wherein, she spent a decade and half in various business roles across Content Syndication, Licensing and Merchandising, Solution Sales and Advertising Sales.
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