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Using the SDGs to unlock shareholder value

BNP Paribas organizes inaugural Sustainable Future Forum in Singapore

It was a star-studded affair. To emphasize the bank’s recognition of the importance of the United Nations’ Sustainable Development Goals, BNP Paribas organized a one-day conference in Singapore on October 27. Keynote speakers included Ms Cherie Blair, CBE, Founder of the Cherie Blair Foundation for Women and tennis legend Chris Evert. (The forum coincided with the BNP sponsored WTA Finals Singapore tournament.)

The main theme of the event was the need for private sector capital to finance the USD 5-7 trillion required annually to reach the SDG’s ambitious targets. The importance of green bonds in this context was emphasized by Dr. Yanick Glemarec, Assistant Secretary General of UN Women. The bonds’ lower cost of capital and longer tenure makes them ideal for financing projects that defy the still prevailing logic of short-term returns on investments.

The event was particularly effective at emphasizing that significant work still needs to be done to achieve SDG 5: Gender equality and empowerment of all women and girls. Referencing the World Economic Forum’s new Release of the World Economic Forum’s ‘The Global Gender Gap Report’ 2016, Ms. Blair stated it is “simply unacceptable” that it will be another 170 years before women can participate equally in the economy.

Pointing to a growing body of studies by, among others, McKinsey and the World Economic Forum that have proven how gender diversity of boards “makes for better decisions” and stronger companies, she called for corporate leaders to have at least 30% women on their boards[1]. Addressing institutional investors and their need for better returns, she suggested they demand better than today’s “pale, male and stale” boards.

Elliott Harris, Assistant Secretary General , United Nations Environment Programme reinforced and broadened the event’s scope when he stated that “anyone who wants to make money in the next 10-15 years has to take sustainability issues into consideration”.

A message that was driven home further by Pep Canadell, Global Carbon Project and Tessa Tennant at SynTao: At 2015 rates of emissions, the global carbon budget for staying below 1.5°C will be used up in only 4 years. Meanwhile, the gap between corporate commitments to date and CO2 reductions required to meet even just a 2°C goal is still more than 3Gt annually.

In return, the resulting climate change will be having a significant negative impact on those same corporations. Andreas Schaffer, Avalerion Capital presented on the findings of a joint study by Avalerion and BNP Paribas that basically leaves companies (and by extension investors) with a simple choice: Accept higher regulatory impact through appropriate pricing of carbon now and collectively avoid the worst impacts of climate change, or save in the short term and see a much larger decline in profits by 2025 with a corresponding decline in share values.

Moving on to commodities, a panel of experts including the World Bank, Lendlease and the United Nations Environment Program discussed how the financial sector has an important role to play in making sustainability viable. Examples included longer tenure financing for farmers to transform their models to sustainable models such as agroforestry, as well as public private partnerships enabling consumers to make sustainable choices by absorbing the premium that is often required to produce agricultural commodities sustainably.

Overall, the forum successfully demonstrated two main points:

  • The Sustainability Development Goals can only be successful if significant private sector capital is mobilized.
  • The required funds are available and investment mechanisms exist to ensure they get used sustainably.

On a side-note, it was good to see that for once event logistics were in sync with its topic: Instead of paper brochures, a rack with QR coded browsing copies allowed delegates to get their copies electronically and reusable glass bottles with tap water were provided on the tables in the conference room.

We hope that BNP will consider making this an annual event and we are looking forward to the next Sustainable Future Forum.

[1] For a demonstration of how deeply the idea of male dominated boards is rooted in our society, Ms. Blair suggested searching for images on Google using the term “CEO“. In our test, there are indeed only two results depicting female CEOs in the first 40 images returned – and one of them is ‘CEO Barbie’.

Congratulations to our client CDL for being named as Asia’s Top Property Developer and Top Singapore Corporation for third year in a row

Congratulations to our client, City Developments Limited (CDL) for being named the Top Property Developer in Asia and Top Singapore Corporation, for the third year running.

CDL is now in the 2nd spot in the list of top 100 most sustainable companies in Asia. It is also the only Singapore company and property developer in the top 20 list for 2016.  CDL is the only Singapore company to have made it to the top 10 list for three consecutive years since the inception of Channel NewsAsia Sustainability Ranking in 2014. The Ranking highlights the overall top 20 companies and the top three businesses per country. It provides investors and consumers insights into corporate sustainability practices, and enables companies to benchmark their sustainability performance against other regional businesses.

Mr Grant Kelley, CDL Chief Executive Officer said, “Sustainability is fast becoming mainstream in today’s global business environment. CDL has always been a firm proponent of integrating sustainability into our corporate vision and business strategy. This has created long-term value not only for CDL, but also our investors, customers, the broader community and the environment. CDL will continue to push forward with sustainable innovations and practices across our operations and supply chain. With the rise of green consumerism and global expansion of Socially Responsible Investment Funds, we believe our sustainability commitment will enable us to tap more growth opportunities ahead.”

CDL has spearheaded numerous groundbreaking innovations in green properties, including the first CarbonNeutral® development in Asia Pacific and Singapore, 11 Tampines Concourse; Singapore’s first Eco-mall, City Square Mall; and Tree House condominium, which achieved a Guinness World Record for the largest vertical garden.

CDL Tree House sustainability

As shared in its 2016 Integrated Sustainability Report titled ‘Integrating our Strengths, Creating Future Value’, CDL has also introduced robust targets for reduction in energy and water use. These new targets are in addition to CDL’s carbon emissions intensity3 reduction targets set in 2011 – 22% by 2020 and 25% by 2030, from baseline year 2007.

In 2016, CDL further took the lead as one of the first Singapore companies to align its material
issues to the United Nations (UN) Sustainable Development Goals (SDGs) launched in September
2015. The SDGs are expected to form a global standard that will inform future policy decisions and
legislation by governments. Businesses that support the SDGs are thus more likely to be aligned
with emerging policy priorities, potentially enhancing their licence to operate.

2015 – The Tipping Point for Meaningful Change?

The Paia team attended the Responsible Business Forum for Sustainable Development 2015 (RBF) held at Marina Bay Sands Convention Centre and Gardens by the Bay, 3 to 4 November 2015. The RBF saw over 600 business leaders, policy makers and NGOs from around the world gather to share innovative solutions for creating sustainable growth and delivering the Sustainable Development Goals.

2015 is indeed being hailed as a historic year for the world. The discussion at the RBF could not have been more timely, focusing on two major events this year. First, this year has seen the launch of the new post-2015 Sustainable Development Goals (SDG) to ensure prosperity and environmental protection for future generations. Second, this year will end with a new treaty to be agreed upon in Paris where the United Nations Climate Change Conference COP 21 will take place. This is where the worlds nation states will decide to limit the greenhouse gas emissions and prevent global warming beyond the two degrees that is expected. In addition, the current haze situation in the region was a hot topic that raised a few questions for the policy makers from around the region. In the opening plenary address, Singapore’s Minister for Foreign Affairs, Vivian Balakrishnan called it a ‘man-made tragedy’ and asserted that growing consumer awareness on sustainable business practices and companies’ supply chains, means that businesses have to be more transparent in their operations and policies.

Day one of the conference saw business leaders, international government officials and sustainability experts across several sectors such as agriculture and forestry, palm oil, consumer goods, building and infrastructure, energy, mining and financial services hold pertinent discussions about how improvements in innovation and technology, mind-set shifts and transparency are necessary for businesses. In the face of an ever increasing population, a consumerist society, strain on the earth’s natural capital coupled with rising carbon levels, businesses must embrace sustainability at all levels and restructure their conventional practices if they want to continue operating in this climate.

This paradigm shift has already occurred for some innovative companies such as Autodesk, April, and DSM – who have embraced transformational sustainability changes such as new closed-loop and circular business models and have become leaders in their own right. The various panels explored the possibility of transitioning to a low carbon economy, and the benefits and challenges of placing a monetary value on natural capital. Almost all agreed on the imperative need to integrate this valuation into future decision making. Organisations present were WWF, Ersnt & Young, South Pole Group, A*STAR, Rolls Royce, Aviva, Trucost, Autodesk, DHL, and NTU, to name a few.

The Sustainable Development Goals were discussed in great detail on day two by policymakers from around the region, business leaders and NGOs. The speakers ranged from businesses such as Levis Strauss & Co, Novartis, INDISKA, Sime Darby, Wilmar, HMP Family, policy makers from the Philippines, Indonesia and Malaysia, and NGO’s such as UN Women Singapore, WWF etc. The SDGs were combined into broad topics and the speakers shared their thoughts on approaches and programmes that will contribute to a transformative, inclusive, low-carbon economy where a dignified standard of living can be achieved by communities. NGOs had a special role to play on this day, as they shared their thoughts on forging effective, multi-stakeholder partnerships which are crucial for successful collaboration.

Look out for more on this page by the Paia team on Green Freight Asia (GFA) Forum: Bringing Green Freight Practices to Scale.