Blog : BOARD TALK
|Posted on September 5, 2016 at 9:55 AM|
From my vantage point in Singapore, these are exciting times. This is how China reported the #G20 summit:
— China Xinhua News (@XHNews) September 4, 2016
Certainly, weekend news from Hangzhou that the world's two biggest culprits on greenhouse gas emissions - the United States and China - had ratified the Paris agreement to cut them marked a major step forward in leadership on the issue. It has set the stage for other countries to follow suit, as Reuters reported.
"The US-China announcement will have an immediate impact on businesses and investors" says a fast response from We Mean Business, a coalition of global businesses and investors. But what implications will it have for Asia's boardrooms and their levels of engagement with investors and more generally around environmental, social and governance (ESG) issues ?
The United Nations supported not-for-profit Principles for Responsible Investment (PRI) is holding its annual conference on this, its 10th year, in Singapore. (Disclosure note: I have covered them in the past in my writing, and I am on the last leg of a six month social media consultancy contract - and will be live tweeting the event @PRI_News and @dinamedland. You can also follow the #PRIinPerson).
Palm OIl is Asia's most burning #ESG issue, and on the eve of the conference PRI has taken a group of investors to see the impact of its use for themselves. PRI's Head of Policy, Will Martindale, has been reporting from the field.
Today, took 23 investors with $4.8tr in assets to Tesso Nilo, Indonesia, to learn about ESG risks in palm oil. pic.twitter.com/QlwjGN1bCk— Will Martindale (@WillJMartindale) September 4, 2016
The conference will have a session on this issue, recently highlighted by the experience of Korindo. Some of the world’s biggest buyers have stopped trading with the Korean palm oil firm after the emergence of footage claiming to show illegal burning in Papua province, The Guardian reported.
Palm Oil is just one specific ESG issue in a whole sea of them affecting Asia's businesses. During the conference PRI will - alongside the UNEP FI and the Generation Foundation - release a report on Investor Obligations and Duties in Asia which will consider the importance of getting the language of ESG right.
Better language for better communication is one aspect of moving forward in a collaborative way in the purpose of business. But defining goals more clearly is also critical, as is evident in the rise of investor activism in Asia.
"Companies headquartered in Asia have faced 43 public demands from shareholder activists this year, according to Activist Insight — putting the region on course to beat last year’s record 53 actions" reported the Financial Times in July.
While this may seem small, compared to the 317 such actions at groups in the United States in the same period, the FT report paints an interesting picture of differing activist tactics in Asia.
It's the other side of the world, for some of us who are suffering from jet lag to be here very briefly. But it is a critical part of the world - and it will interesting to watch how it treats the rise and rise of ESG - which I have chronicled in multiple postings on Forbes.
Here, on investors in emerging markets 'more engaged' on ESG concerns, and going back to May 2014, 'Sustainability' Moves Into The Mainstream As 'Profits With Principles And Less Risk'.
See you at the conference - either in person here, at Marina Bay Sands, or in cyberspace. And for more on my writings on this subject, just google me.