by Clelia DanielThe CSR Asia Summit and the UN Global Compact and Accenture recently released their third CEO Study on Sustainability. This is very timely given that there was a lot of discussion at the Summit about engaging CEOs. The Global Compact and Accenture study assessed the views of CEOs on what is needed for corporate sustainability to have a transformative impact on markets and societies. The study dedicated an entire section to Asia, admitting that the Asian leaders were underrepresented in the previous studies. Around a thousand executives were interviewed from 27 industries across 103 countries, 187 of which were from the Asia-Pacific region.
It is certainly true that corporate commitments to sustainability appear to be on a rise. As Richard Welford, Chairman CSR Asia mentioned in his closing remarks, we are no longer discussing if there is a correlation between CSR and financial performance, it is now matter of understanding how big it is and what timescale we are considering.
The study confirms CSR Asia’s Summit perceptions, as 76 percent of the interviewed Asian CEOs expect sustainability to transform their industry within five years. This percentage has doubled since the first survey. Moreover, half of the CEOs in Asia (52percent) stated that sustainability will be “very important” to the success of their business, overpassing their counterparts in Europe, with just 34percent. However Asian leaders are far from being the world champions on sustainability, the figures for Latin America and Africa are 61percent and 68percent respectively.
Clearly Asian business leaders are aware of the challenges their countries are facing, being at the world largest and most inefficient resource user: “the region requires three times as much energy input per earned dollar of GDP”.
I was not surprised to read a paragraph of the Survey called “The Lens of Proximity”, meaning that the Asian CEOs, not similar to their global peers, are mainly focussed on issues that are close to their homes. When asked about their top three most important sustainability challenges for the future success of their business, half of Asian CEOs said it was growth and employment (50percent), followed by education (46percent) and energy (43percent). At the country level, CEOs identified the challenges of poverty alleviation and water security in India, air pollution in China and energy security in Japan.
I was surprised indeed to read that Asian CEOs thought that “business is making sufficient efforts to address global challenges, and that their own industry and business are doing enough”. The same perception is not shared by their global peers.
The spread of discussions at the CSR Asia Summit focussed on issues such as growing inequality, social cohesion, rapid urbanization, environmental challenges, water shortages, and disaster preparedness; reflecting CSR Asia’s leadership on steering the CSR agenda away from philanthropy and contributing to more strategic actions.
Unfortunately, similar to number of studies, the survey confirmed that the sustainability concept and CSR in Asia has is still interlinked with philanthropy and the transition beyond that has often not been yet made. More than two third of CEOs in Asia report that they view sustainability as an “opportunity to give back to local communities through charitable activities” (70percent versus 51percent globally).
The vast majority of interviewed CEOs in Asia (91percent) believe that “governments must actively encourage sustainability through policymaking and regulation in order to harness sustainability as a transformative force in the global economy”.
Unlike business in other parts of the worlds, from the survey it emerged that Asian CEOs wished the policymakers would set clear rules on taxation, regulations and standards to guide the sustainability challenge. It seems like many CEOs in Asia have forgotten that the “C” on CSR stands for “corporate”.
Interesting are the survey findings on the perceptions of consumer interest in sustainability. The study states that “Chinese CEOs are more confident than their global counterparts when it comes to consumer interest in sustainability, with 93percent reporting that they believe the sustainability performance of their goods and services is important to their consumers’ purchasing decisions. More than half of CEOs in China, 57percent, believe they have secured a price premium with consumers through their approach to sustainability, versus a global average of just 28percent.”
Oppositely, their neighbours in India (17percent) as well as their counterparts globally (47percent) have a much lower belief on consumer demand as a significant driver for sustainability. Personal motivation is in fact more important among Indian leaders: “50percent of Indian CEOs indicate that personal motivation is one of their most significant motivations to act on sustainability; only 25percent of CEOs throughout Asia feel similarly.”
It seems that we still have a lot more to do to convince Asian CEOs to think strategically about CSR.
(Clelia Daniel – cdaniel@csr-asia.com- is the Program Manager of the 4-day Intensive Courses in CSR offered jointly in Bangkok by AIT and CSR Asia.)
