Asia 'best placed' to design future

Panellists at yesterday’s “SCG Asean Sustainable Development Sympo-sium” agreed that problems in developed countries, stemming from excessive consumerism, were raising risks for environmental and social tensions. “Green economy” should, however, help Asian countries remain players on the world stage in a sustainable way, they said.
“If [those in] Asia think they won’t do it if the US doesn’t do it, the world is over [in terms of sustainability]. Asia has a large population and is capable of designing a better mechanism than the West,” said Peter Bakker, president of the World Business Council for Sustainable Development (WBCSD).
“If all people in Asean, China and elsewhere adopt the American dream of consumerism, the world will have no chance of becoming a sustainable place.”
Supachai Panitchpakdi, secretary-general of the United Nations Con-ference on Trade and Development, said companies must be mindful of others’ needs beyond profits.
Under this philosophy, provident funds can take the lead in promoting sustainable development by channelling 50 per cent of their portfolio to listed companies that demonstrate good practices, he said.
However, he acknowledged that the process would not take place overnight, and would take a lot of persuasion and coercion.
To Supachai, also a former secretary-general of the World Trade Organisation, problems in Western economies do not mean that capitalism is bad in itself. Capitalism is a blend of market mechanism and rules, as “human beings are not perfect”, he said, adding that rules were necessary to minimise abuse and protect other stakeholders.
He also sees little room for the United States to take a lead in this matter, given its public debt of US$7 trillion (Bt215 trillion), which would stymie the country’s fiscal room to manoeuvre for a long period.

MINDSET CHANGE NEEDED
Bakker of the WBCSD said political leaders should also change their mindsets.
The world flourished after industrialisation at a huge environmental and social cost, and governments rely on a labour income-based taxation structure. Now, however, when natural resources are depleting, it is time for policy-makers to change the rules, and to tax in accordance with |the depletion of natural resources, Bakker said.
Admitting that sustainable development demands stability, Bakker said many companies were now setting their own course, knowing that those at the political and international levels could not deliver the necessary impacts.
Puma, for instance, reserves half of its net profits as the social and environmental cost of its operations.
The German sports footwear and clothing manufacturer encourages the innovation of new materials to reduce its carbon footprint, which in turn damages the environment less and reduces the cost.
This practice in the next three years will be shared by all members of the WBCSD, he added.
In Thailand, only SCG (Siam Cement Group) and PTT are members of the organisation, whose global membership now contributes 11 per cent of the world’s gross domestic product.
As a start, business leaders should look beyond initial costs.

THE SCG APPROACH
SCG president Kan Trakulhoon said the company’s waste-heat project had cost the company Bt5.8 billion, generating only 6-8 per cent of |earnings before interest, tax, depreciation and amortisation (EBITDA) on investment.
He said that at the time, he had thought about the benefits to the environment and society but, as oil prices spiked, the company also benefited from lower energy costs, which helped push SCG’s EBITDA on investment to 25 per cent.
A side benefit is that SCG has become attractive to talented young workers who possess high environmental and social awareness, he said, adding that this in turn increased the employment engagement in the management’s environmental and social policy.
“Our policy is that campaigns are to be executed no matter what the economic conditions are. When the economy is in a downturn, our board is even more committed, knowing that others among our peers could do less,” he said.
SCG this year won the DJSI (Dow Jones Sustainability Indices) recognition as the world sector leader in the building-materials and fixtures sector for the second consecutive year.