Sustainability Is Seldom a Priority Among Boards in the Asia Pacific
Press Release
28 May 2024
Only 21% of Asia Pacific boards prioritise sustainability as short-termism, profit maximisation, and stakeholder bias remain key concerns, reveals a new study.
Sustainability is seldom a board-level priority in the Asia Pacific, with a lack of intent and ability holding boards back, revealed a research study conducted by Stewardship Asia Centre (SAC) with the support of 13 institutions across 11 Asia-Pacific countries.
Based on the study “Boards as Stewards of Sustainability: View Across Asia Pacific,” only 21% of respondents indicated that sustainability is a responsibility of the entire board. About 26% of respondents said sustainability is the responsibility of the board's chairman or the C-suite executive, and 16% shared that no one owns sustainability on their boards.
Separately, 11% of respondents indicated that their boards almost never evaluated progress on ESG considerations, and 16% said they do so once a year.
The survey also revealed that a lack of knowledge on sustainability is the biggest staller, with three in four boards citing it as a challenge they must overcome. The survey respondents indicated that despite increased awareness, many directors lack a deep understanding of the complexities of sustainability and its implications for business operations. The research also revealed that sustainability knowledge as a hiring criterion is still, at best, a good to have in three out of five boards.
A lack of intent on sustainability is illustrated by the fact that board directors tend to focus on short-term results, profit maximisation, and the interest of specific groups of stakeholders. Many are also risk averse, preferring to maintain the status quo. (see chart below).
The “heart” of boards, however, seems to be in the right place. One in three board directors consider sustainability an integral part of the corporate purpose. A significant fraction of respondent board directors aspires to spend more time than they currently do on sustainability, innovation, talent development and organisational culture while rationalising the time they spend on financial performance evaluation and regulatory compliance.
“The research results highlight that more needs to be done to drive action and impact in the Asia Pacific to create a collective better future. True leadership in the 21st century demands an understanding of stewardship values to drive sustainability and long-term growth. Sustainability should not be seen as an obstacle or a risk mitigation endeavour, but as an opportunity to redefine corporate strategies that will build success for the environment, humanity, future generations as well as the business,” said Mr Rajeev Peshawaria, Chief Executive Officer, SAC.
“It is all about boards' intent to drive the sustainability agenda, and their ability to execute it. Boards that disproportionately focus more on sustainability opportunity than sustainability risk, will emerge as long-term stewards,” added Mr Sunil Puri, Senior Vice President of Research and Engagement at SAC.
Led by SAC, the study collated and analysed inputs from board leaders across Asia-Pacific via an online survey that kicked off on 31 August 2023. Additionally, the team conducted in-depth interviews with 77 board chairs and independent directors.
The survey gathered 637 responses from 11 countries: Australia (17%), Malaysia (15%), New Zealand (13%), India (13%), Vietnam (10%), Philippines (8%), Singapore (7%), Pakistan (6%), Indonesia (4%), Sri Lanka (3%), and Japan (3%).
Among the respondents, 37% were independent non-executive directors, 18% were executive directors/CEOs/managing directors, 15% were board chairpersons, 14% were non-executive directors, and 5% were company secretaries. By company types, 41% of responses came from publicly listed companies, 37% from private companies, 14% from state-owned enterprises, and 9% from other entities.
"We extend our gratitude to our partners for their invaluable support and expertise," remarked Mr Puri.
The study received support from the following partners who collected data and contributed to key research findings in their respective regions:
| The Association of Chartered Certified Accountants (ACCA) | Board Stewardship Inc., India |
| Directors Australia | Institute of Corporate Directors (ICD), Philippines |
| Institute of Corporate Directors Malaysia (ICDM) | Indonesian Institute for Corporate Directorship (IICD) |
| Japan Association for CFOs (JACFO) | Kerridge & Partners, New Zealand |
| Pakistan Institute of Corporate Governance (PICG) | Singapore Institute of Directors (SID) |
| Singapore Management University (SMU) – Executive Development | The Sri Lanka Institute of Directors (SLID) |
| Vietnam Institute of Directors (VIOD) |
To download the report, scan here:
Media Contacts:
Ang Bee Lin
Head of Digital Strategy & Communications, Stewardship Asia Centre
Email: [email protected]
Tel: +65 9238 8418
Nicole Chan
Assistant Manager, Digital Strategy & Communications, Stewardship Asia Centre
Email: [email protected]
Tel: +65 8028 8633
About
Stewardship Asia Centre (SAC) is a non-profit organisation dedicated to helping business and government leaders, investors, and individuals accelerate leadership action on environmental and social challenges through catalytic knowledge and advisory. We are part of the Temasek Trust ecosystem with a shared purpose of building a better future for every generation. Temasek Trust is the philanthropic arm of Singapore-based global investor Temasek Holdings.