Environmental, Social and Governance (ESG) awareness is increasing exponentially as revealed by the latest report from IT infrastructure firm Kyndryl. The study found that 77% of organizations in ASEAN are focusing on becoming sustainable organizations.
The respondents said they are being driven to develop and demonstrate an ESG consciousness in their actions and investment, by their customers, investors, and by governments’ sustainability mandates. Kyndryl commissioned technology and research advisory firm Ecosystm to survey 500 C-suite leaders in the region for the report “Kyndryl ASEAN Digital Transformation Study 2022.”
“As ASEAN is predicted to become the fourth largest economy in the world by 2030, there is now a huge responsibility for businesses in the region to balance the long-term imperative of a net-zero future with the short-term need to safeguard the bottom line,” said Wilson Go, managing director, Kyndryl Philippines.
However, the study also found that many organizations pursue sustainability goals without a strategy backing them up with only 23% of organizations in ASEAN having a corporate sustainability strategy. Organizations are grappling with how to integrate their data to set science-based targets, all while navigating external challenges such as stricter regulations. The results indicate that while organizations in ASEAN are aware of their responsibility to balance sustainability and profitability, there are still challenges that hinder them to set and achieve their sustainability goals.
Only 4% of organizations across ASEAN have a holistic strategy and are focusing on external and last-mile challenges such as negotiating ambiguous reporting frameworks.
The study finds that the leading barriers to sustainability projects in ASEAN are: 60% operational costs, 55% data availability, and 50% lack of dedicated resources.
“This confirms that organizations’ sustainability initiatives are still at the preliminary stage,” the report said. “In today’s data-driven world, it is very likely that organizations have access to the data needed for their sustainability efforts. But it is often not integrated within their overall data strategy that helps identify the right data sets, collect the necessary data across all operations, and have embedded analytics for the right insights.
While sustainability initiatives are yet to mature, some industries are leading the way in their strategies, and especially in their initiatives. Media & Telecom and Energy & Utilities, for example, are among the most mature industries given the incentives to adopt sustainable practices that are cost-related and for future survival. Other industries that have initiated smaller eco-friendly measures have also found some early success and this includes the Retail industry where there has been a focus on reducing the use of plastic in packaging and procuring locally to reduce carbon footprints.
“In today’s evolved economies, an organization’s relevance and success will be measured both in terms of financial and climate aspects,” said Ullrich Loeffler, CEO, Ecosystm. “This has spurred organizations to appoint Chief Sustainability Officers and highlighted the growing importance of sustainability skillsets for tomorrow’s workforce.”