3: Conversations on Climate Governance: Climate change: Directors’ Duties and Governance - Part 1

This is the 3rd session of 6 webinars brought to you by the ASEAN Climate Governance Network and the Sustainable Finance Institute Asia.

Opening Remarks by the host Datin Seri Sunita Rajakumar, Chairperson of Climate Governance Malaysia. She talked about the launch of the ASEAN Climate Governance Network which was formed by the Institutes of Directors in the region who came together to volunteer to create a conversation on how to increase collective climate resilience.

Vicky Bowman, Chairperson of the Myanmar Institute of Directors moderated the panel discussion with:

Elim Sritaba, Chief Sustainability Officer of Asia Pulp & Paper started with a brief on Asia Pulp & Paper, a manufacturing company that delivers products of paper tissue and packaging. Elim shared on Asia Pulp and Paper climate change initiatives starting from the Governance Structure of the company, where the management board holds regular meetings to go over economic, environmental, and social issues in detail. Within the board, there is a committee that meets monthly to review the company’s sustainability performance, direction, and strategy. While receiving & addressing stakeholder communications, the committee is constantly evaluating & strengthening APP’s sustainability policies and commitments. They also align their economic & environmental considerations with government regulations. The company's sustainability journey started in 2012 with the launch of “Sustainability Roadmap Vision 2020”. Forest conservation policy was launched with the commitment to protect the natural forest and also pit land management to establish the best management practice and social responsible commitment in addition to how they make sure the global supply chain commits to their sustainability strategy.

Richard Allen, Local Principal of Baker McKenzie who is a Dispute Resolution Lawyer). He advises clients on risk avoidance and risk mitigation strategies. He shared that 600 senior legal and risk leaders from large organizations based around the globe were surveyed and they identified environmental and climate change risk as one of the top 3 risks likely to result in dispute in 2022.

Government risk came in number 5 and social risks came in number 17, but it’s important to note that these two aspects of ESG can be a little harder to define because many people consider employment risks to fall under the social component of ESG, but it’s listed separately in the survey.

The key takeaway from this is that ESG issues aren’t simply some amorphous or hypothetical buzzword that’s just being banded around as they do pose very tangible risks to businesses and are increasingly resulting in fully-fledged litigation & regulatory action, so it should be taken seriously and that is where as a firm come in & try to advise clients recognizing those risks & practical implications of potential ESG issues and key examples.

Dante Briones, the third speaker from Sansonbi, shared his perspective on a business that is supplying larger companies, particularly on solar solutions. At Sansobi, efforts have been made to contribute to climate change. In most of the companies surveyed, climate change initiatives are embedded in their business strategy. Board members of companies are very much involved and report to the board normally on a quarterly basis and some companies have an ESG committee of the Board. The measures and targets monitored by the Board are on science-based metrics. Some companies also influence their vendor/suppliers to implement climate change-related projects. However, currently, there are no standard methods to measure the result.

The seminar concluded with a discussion of what the government of each country, specifically Singapore, Indonesia and the Philippines is doing to encourage companies to adopt ESG.

If you missed the webinar, you can watch the recording here.