Sustainable development, business opportunities go hand in hand

May 24, 2020by

WHILE saving human lives and rebooting the economy are two utmost priorities for government consideration when developing post-Covid-19 stimulus packages, we must not forget Nature. Society needs to change its outlook and give prime importance to halting the environmental deterioration increasingly obvious all around us, and to preserving and sustaining our home.

This is a critical moment for businesses to demonstrate leadership, to turn this challenge into an opportunity and establish business models with a laser sharp focus on sustainability. This doesn’t mean smaller profits. It does mean innovation — doing things faster, better, cheaper, and using fewer resources while achieving greater output.

It means deployment of technologies connected within the Internet of Things, automation, machine learning, real-time data and monitoring, big data analytics and more — circular economy solutions. The Fourth Industrial Revolution innovation underway will save energy, decrease waste of food and materials, and reduce greenhouse gas emissions. They will contribute to development, to human wellbeing, and to long-term success for companies that pursue them.

A hot-button issue when discussing sustainability is the palm oil industry. Malaysia and Indonesia are jointly responsible for about 86 per cent of global production, and oil palm is the oil crop with the highest yield per hectare — an indispensable part of the 21st Century sustainability strategy.

Palm oil is an important ingredient in a range of products, including biodiesel. And, following the European Union’s Biofuel Directive in 2003, palm oil production in Malaysia and Indonesia accelerated, which contributed to deforestation as plantations expanded to meet rising demand.

And as a consequence, our peatlands — where much of the deforestation happened — were burnt and degraded, releasing enormous greenhouse gases into the atmosphere. In the light of these insights, the EU passed legislation in 2018 that bans South East Asian palm oil as a feedstock for biodiesel and reduces its use for any purpose to zero by 2030.

Caught in this sustainability-driven seesaw are palm oil producers and most critically, large numbers of smallholders across the region who depend on this crop for their livelihoods.

Just after independence, Malaysia’s poverty level was 47 per cent. Today it is less than 5.0 per cent, thanks largely to oil palm. Our debt to this industry is great. But the priority today is to stop deforestation, to take care of the forests that remain, their precious biodiversity and the dwindling wildlife in them.

South East Asian companies must find ways to increase yield in the areas already in use and the sustainability of the whole palm oil supply chain, to maximise uses of the industry’s residue, and to diversify income streams for local farmers and communities.

This challenge is keeping companies viable, innovating to help local societies prosper, and putting a stop to deforestation and runaway carbon emissions. It can be done. The role of policymakers and government is fundamental to encouraging and enabling these sustainable business opportunities and practices.

Likewise, platforms such as the Malaysian chapter of the World Business Council for Sustainable Development (BCSD) are critically important, allowing member companies to share solutions that have shown their value and efficacy, saving precious time and effort.

There is compelling evidence that companies prioritising the environment, social responsibility and good governance enjoy sustainable financial performance. Investors, stakeholders and potential customers expect, in some cases demand, that companies and their boards perform well with respect to, for example, water management, biodiversity, or labour exploitation in their supply chains. Effective performance with respect to sustainability issues is now a competitive advantage.

Forward-looking businesses will pursue the enormous opportunities that true sustainability has to offer. By recognising emerging mega trends such as the accelerating de-carbonisation of the economy, or the need for agricultural innovation to safeguard food security for a growing world population, companies will gain an enormous advantage over less sustainable competitors.

It is up to industry shakers and movers to lead by example, and for all industries of different kinds to engage with and use the BCSD Malaysia platform for sharing sustainability practices, leverage the knowledge and reach of the global organisation’s international network, and to apply that in a range of areas, from climate and energy or food and agriculture to human rights.

I invite firms to join the BCSD Malaysia. Together, we will transition to a more sustainable future for business, society, and the environment for Malaysia.

The writer is the newly appointed chairman, Business Council on Sustainable Development (BCSD), Malaysia and Ambassador and Science Adviser, Campaign for Nature

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