A PATHWAY TO GREEN RECOVERY FOR ASEAN
By CARI ASEAN Research and Advocacy | 12 November 2021
Writers: Eleen Ooi and Eta Ahmad | Webmaster: Nuratiqha Abd Razak | Research Director, Editor and Supplementary Writer: Jukhee Hong
The 26th session of Conference of Parties (COP26) held in Glasgow raised the call to involve non-state actors to help deliver climate finance with the help of multilateral development banks and the private sector to mobilise trillions of financial support needed by developing and least developed countries. This report has been prepared in consultation with trade associations, chambers of commerce and foreign business associations in the ASEAN region to better understand and socialise the climate agenda with the private sector operating in ASEAN.
The “Pathway Towards Green Recovery for ASEAN Report” is the third instalment of a series of Pathway Reports following the release of A Pathway Towards Recovery and Hope for ASEAN (Pathway 225) in 2020 and Pathway for Malaysia 2021 that captures recommendations, perspectives and priorities from the private sector’s perspective.
The report consists of recommendations in green recovery for ASEAN proposed by over 26 chambers of commerce, business councils, industry groups and partners from all ten ASEAN member states, dialogue partner countries and regions including EU, UK, US, Japan, India, Canada and Russia.
This report captures 88 critical feedback and recommendations from two virtual Consultation Dialogues on business perspectives with regards to green initiatives following the COVID-19 pandemic, policy gaps affecting a green recovery, challenges and the required support for a green recovery in ASEAN. Key questions presented during the consultative sessions are as follows:
- Key green areas critical to sustainable recovery for businesses
- Green initiatives or green opportunity areas most relevant to businesses
- Key areas of concern in adopting green initiatives
- Government support that can encourage or further drive green initiatives
- Key consideration in investment decisions for businesses
Chapter 1: Key Green Focus Areas Critical to ASEAN Businesses
The recovery from this pandemic presents the defining opportunity. Long-term economic recovery needs to address environmental crises through consolidating climate and action initiatives at the heart of the recovery efforts.
Focus is on areas where economic viability exists. Capital and operational expenditure have to cost less, especially in areas relating to green technology to create economic viability. There is a need to balance green strategies to ensure financial returns on investments. Companies also look at how ESG will advance the company’s profile, environment, social and governance (ESG) profile, how it will attract potential investors, higher returns and increased recognition by the community and state.
The private sector has identified gaps and proposed recommendations in the following areas requiring urgent attention:
- Energy transitioning
- Circular Economy
- Environment Financing
- Sustainable Finance
- Greening SMEs
Chapter 2: Key Areas of Support Needed to Drive Green Recovery in ASEAN Businesses
Businesses looking forward to climate-aligned sustainability have urged governments to become agents of green recovery, by ensuring that regulatory practices, infrastructure finance, innovation and digital solutions, and workforce readiness are green friendly. Governments and Ministries are also urged to be role models in driving green sustainability.
The private sector has proposed the following recommendations in driving support for green recovery in ASEAN businesses:
- Stimulus packages, fiscal measures and taxation
- Ensuring future of work, equality and social justice
- Fostering public-private partnerships
- Providing clear frameworks
Chapter 3: Key Areas of Support Needed to Drive Foreign Investments into ASEAN and its Member States
Despite the market potential and demand for green recovery, there is insufficient support and incentives provided by the government to attract and drive the growth of green investment in most AMS in the region.
Feedback from investors during the Dialogue indicated a similar conclusion with proposed recommendations to focus on the following areas:
- Net-zero initiatives, carbon market and incentives
- Ensure economic policies are tied to green policies/ agenda/ initiatives