Southeast Asian firms top the charts globally for their bullish growth prospects as well as their sense of accountability for achieving the United Nations’ sustainability goals. However, commitment needs to convert into practical action, according to HSBC.
The findings come from HSBC’s ‘Navigator: Now, next and how’, a survey of over 9,100 companies in 35 countries and territories, including the views of the key decision makers in 2,299 businesses across Southeast Asia.
Navigator reveals that 81% of companies in Southeast Asia are projecting business growth next year (higher than the global average: 79%). Additionally, 76% of surveyed Southeast Asian firms believe they have a role in delivering the United Nations’ Sustainable Development Goals1 (SDGs), compared to the 63% global average.
The bullishness of Southeast Asian firms reflects the growth trajectory and favourable demographics of the region. Collectively, the 10 ASEAN countries’ combined GDP stood at almost USD$3 trillion in 2018 - more than the UK, France or India2, and the region has enjoyed 5% growth rates over several years3.
However, the case for sustainable development across Southeast Asia is irrefutable given the region is increasingly and disproportionately exposed to climate change. For example, Lloyd’s estimates that USD$22.5 billion of GDP is at risk from flooding in Southeast Asian cities alone4. If left unaddressed, the Asian Development Bank forecasts that climate change could reduce Southeast Asia’s GDP by 11% by the end of the century5.
Matthew Lobner, Head of International and Head of Strategy & Planning, Asia-Pacific, HSBC, said: “ASEAN is home to some of the world’s most bullish businesses – and these high-growth firms are acutely aware that sustainability and commercial goals go hand in hand. It’s very pleasing to see the sense of focus that Southeast Asian firms have towards the UN’s SDGs but must now convert from desire into meaningful action. As investors and governments increase their focus on sustainability, firms need to be focusing on this now.”
HSBC has compiled the following suggestions for how firms can progressively include sustainability as part of its strategy and operations.
Tony Cripps, HSBC Singapore’s CEO, HSBC, said: “Sustainability is intrinsic to driving value and helping to secure the long-term viability of businesses, and failure to act now could severely hamper Singapore’s growth opportunity. While encouraging progress has been made, the next five years are a critical timeframe for businesses to ensure that sustainability is embedded throughout their whole business and that of their value chain.”
1SDGs are 17 interconnected themes, adopted by all United Nations Member States in 2015, as a way to end poverty, protect the planet and achieve peace and prosperity by 2030.
3Per ADB data: https://www.adb.org/sites/default/files/publication/411666/ado2018.pdf. See also http://www.aseanstats.org/wp-content/uploads/2017/11/ASEAN-Statistical-Leaflet-2017_Final.pdf and ASEAN databank https://data.aseanstats.org/
4City Risk Index 2015-2025’, Lloyd’s of London, 2015. http://www.lloyds.com/ cityriskindex/ (accessed 16 March 2015).
5Asian Development Bank “Climate Change Losses for Southeast Asia Well Above Previous Estimate”, December 2015 https://www.adb.org/news/climate-change-losses-southeast-asia-well-above-previous-estimate-adb