Resident Coordinator's speech: GO-ESG ASEAN Conference 2021: Achieving a sustainable ASEAN – Raising business SDG ambitions and mainstreeting sustainable financing

Mr. Faroze Nadar, Executive Director, Global Compact Malaysia and Brunei;

Distinguished keynote speakers and panelists,

Ladies and gentlemen; a very good morning to you.

Allow me to begin by thanking the UN Global Compact for this opportunity to address business leaders and their partners, on the critical contribution of the private sector to environmental, social and governance outcomes, but specifically in delivering the SDGs.  

While I am aware that companies in Malaysia and Brunei have long been familiar with ESG responsibilities, I want to advocate for a renewed focus on the global goals, as a collective imperative, requiring collective actions. 

When the SDGs were framed and adopted in 2015, they were underpinned by principles that differentiated them from past development frameworks.  One of the most important is jointness of action by Government, the private sector, civil society, and people. 

Indeed, the level of ambition embedded in the goals means that it is only by working together that we can ensure their full achievement.  Rapid technological and social change has made this is even more relevant today than it was then.

I want quickly to reference the two priorities of our time – securing a lasting and inclusive recovery from the pandemic, and re-engaging with the fight against climate change.  I then come back to the role of business as a key partner. 

The COVID-19 pandemic has been an unprecedented crisis for humankind – foremost in health, with some 258 million infections and over 5.1 million deaths globally, but also, millions of lost jobs and wrecked livelihoods, schools and colleges shuttered, and in turn, unprecedented levels of social dislocation.  

We have seen considerable reversals in development progress, and the pandemic has put long term progress towards the SDGs at grave risk. 

Within ASEAN, the most significant impacts have included: sharply rising poverty and deprivations; a host of worsening inequities; rising gender inequality; infringements to workers’ rights and working conditions, particularly for those in informal work; and with that, deteriorations in the social contract between states and peoples, growing corruption and falling trust in institutions.  

Moreover, even within the environmental domain, the one area that initially benefited from economic and social shutdowns, we have seen a rapid resurgence of the climate emergency as the global economy began to re-open.

However, it is important to recall that the SDG performance challenges we face both globally and at country level, are not a product of COVID-19 alone.  

Indeed, the world was already off-track back in 2019, when the Secretary General launched the Decade of Action to restore SDG progress.   The pandemic has amplified the fragility of our systems, and exposed deep-seated vulnerabilities.  

As a result, the financing and delivery gaps have grown wider, with some estimates suggesting that over one trillion US dollars is needed to restore progress.  The scale of this task has again made clear that Governments alone, cannot, and will not, put countries back on track.  

Harnessing the private sector’s energy, ingenuity, and innovation is vital, and enterprises of all sizes have a pivotal role to play. 

Second, looking to the longer term, and the increasingly pressing challenge posed by climate change, we must take stock and respond to the outcomes of the COP26.  While there were undoubtedly some disappointments, there are also many reasons to be positive. 

Malaysia and Brunei have committed to high ambitions, including net zero emissions by 2050 and restricting average global temperature rises to 1.5 degrees Celsius.

Regardless of the choice of words in the outcome document, coal-based energy and, in time, other carbon intensive sources, will become technologies of the past.  

These types of assets are now effectively impaired; the clear trajectory is with investment in greener energy.  

And with specific regard to the power of business, we welcome that a coalition of 450 of the world’s biggest investors and fund managers, controlling US$130 trillion in assets, in committing to deploy their collective capital to hit net zero emissions targets by 2050.

It is hugely encouraging that businesses across the globe, including those in ASEAN, are stepping up to the twin challenges of COVID-19 and of climate change.  

The Global Compact, and its ten principles, and events like today, offer much-needed mechanisms for partnerships building.

The role of Governments is to facilitate and enable the required whole-of-society approach. This involves providing the right signals and policy directions; delivering, where needed, pump-priming resources alongside tax and regulatory incentives; and by tracking progress and correcting course.  

It is encouraging to note that here in Malaysia, Government is genuinely trying to address some of the disconnects.

This includes mobilizing businesses to support an inclusive COVID recovery, setting a firm direction on emissions, and by laying some of the longer-term foundations to deliver SDG-compliant financing.  

Before I conclude, I want to underline three key takeaway messages that might guide your deliberations.

First it is vital that we build a genuine partnership beyond the rhetoric, between Governments, civil society and business interests. 

This requires all actors to respect and understand each other’s roles and needs, in delivering a coalition that can accelerate SDG progress.  This requires open and transparent dialogue and commitment, based on the recognition that win-win outcomes are the norm rather than the exception.   

Again, the UN Global Compact can play a vital role.  The function of other business organisations and local chambers of commerce is also important, particularly at different geographical levels. 

It is crucial that basic mechanisms of consultation, information dissemination and leadership are established.  To this end, the UN in Malaysia is keen to support TogetherforSDGs, a platform hub to be launched next year to foster partnerships and showcase private sector SDG-related commitments and solutions.

Second, I cannot emphasize enough that meeting ESG aims, including contributing to the SDGs, is good for business, and unambiguously good for the bottom line.  The gains extend well beyond good corporate citizenship and meeting CSR and regulatory requirements. 

There are myriad opportunities through which companies can maximize value-added and shareholder returns: in marketing and building consumer confidence; in achieving more effective regulatory compliance; in attracting talent and boosting the productivity of all workers; in empowering women; and in sourcing cheaper and more reliable sources of finance. 

It is possible, and even advantageous, to do well financially specifically by adhering to ethical business practices.   These gains are especially pertinent to the national context given the young demographics, the huge untapped potentials of the workforce, and the availability of new technologies and willingness to innovate.  

Third, I highlight the value of the SDG framework as a compass for action and performance tracking of business activities.  

I began by highlighting the collective aims and tasks we face in delivering the goals, but it is also important to recognise that the SDGs offer a practical platform based on a common set of benchmarks and policy “steers”.

The UN has long promoted the value of the SDGs for Governments’ statistical, policymaking and managerial functions, and yet the same is also true for businesses, as the framework provides a ready-made metric for ESG analysis and reporting on the so-called “triple bottom line”. 

Through effective partnerships between the UN and the national statistical offices, SDG targets and indicator data are being enhanced across the ASEAN region, including in Malaysia and Brunei.  These have important business applications – for performance reporting, audit, and impact investment appraisal. And the UN is keen to engage further via the Global Compact in empowering the private sector to harness these analytical resources.

Excellencies, ladies and gentlemen, I conclude by underlining that the Global Compact does sterling work in placing business partners at the heart of efforts to deliver the SDGs, and we are keen to see more companies participating and adopting the ten principles.  

The Compact’s local networks have built a strong basis for the public-private dialogue and the joined-up actions that will be required to deliver on the 2030 agenda. 

At what is hopefully the close of COVID-19 pandemic and the marking of renewed global commitments to addressing climate change, it is abundantly clear that all stakeholders have a role to play in delivering the sustainable and inclusive future we want.  

Let us now work together to enable businesses to become active partners in transforming our world.

Thank you.