{"id":3179,"date":"2024-02-20T23:38:04","date_gmt":"2024-02-20T23:38:04","guid":{"rendered":"https:\/\/insight.thomsonreuters.com\/sea\/business\/?p=3179"},"modified":"2024-06-25T05:32:54","modified_gmt":"2024-06-25T05:32:54","slug":"top-esg-strategies-for-global-trade-in-asia-right-now","status":"publish","type":"post","link":"https:\/\/insight.thomsonreuters.com\/sea\/business\/posts\/top-esg-strategies-for-global-trade-in-asia-right-now","title":{"rendered":"Top ESG strategies for global trade in Asia"},"content":{"rendered":"

Asia’s global trade landscape is full of risks and opportunities. One key area that’s getting a lot of attention is ESG (environmental, social, and governance). A new report by Thomson Reuters shows that ESG strategies are becoming more popular. The report, called the ‘State of Asia\u2019s Position as a Global Trade Leader’<\/a> underscores the growing green movement.<\/p>\n

More than one in four professionals (28%) have plans to address their ESG responsibilities, up from 18% last year. This shows a concerted effort to make Asia’s global trade and supply chain more sustainable.<\/p>\n

Companies in Asia are also working harder to check their suppliers to maintain their corporate social responsibility. Technology is helping them conduct due diligence checks. Read on for more insights from the Thomson Reuters survey.<\/p>\n

How are Asia-based companies addressing ESG issues?\u00a0<\/span><\/h2>\n

Across the regions and industries surveyed, most are making changes to the way they address the pillars of ESG. The survey found that companies are typically adopting several strategies to make a positive impact.<\/p>\n

1. Reducing the use of paper in favour of tech<\/h3>\n

Companies are relying much less on paper these days, and more on electronic data. The digital revolution aligns with sustainable practices. It also contributes to improved efficiency, cost savings and a reduced ecological footprint.<\/p>\n

Technology also plays a role in documenting how well an organisation is governing their supplier networks. These digital solutions are streamlining operations to improve transparency and enforce ethical practices.<\/p>\n

Digital ecosystems offer a range of benefits for companies looking to reduce risk. They enhance collaboration and accountability across the supply chain. The results translate into a more resilient and socially responsible business ecosystem. A majority of corporate leaders (63%) cited this strategy as a priority, seen most prominently in the pharma sector. In Japan, 67% of those surveyed are planning to reduce paper and increase technology use.<\/p>\n

2. Making existing products more environmentally friendly<\/h3>\n

One way to meet higher ethical and social standards is by making existing products or services more eco-friendly. Choosing renewable resources and efficient production methods can help to reduce the environmental impact of products throughout their lifecycle. This commitment aligns with broader ESG goals by contributing to the reduction of carbon footprints. It also promotes responsible consumption and production.<\/p>\n

More than three in five of all surveyed leaders (61%) chose this initiative, with China and Taiwan giving it the highest priority at 70%. Among industries, eCommerce ranked the initiative the highest.<\/p>\n

3. Reducing carbon emissions<\/h3>\n

Growing greenhouse gas emissions are of utmost concern to companies operating around the world. As a result, organisations are exploring more sustainable transportation options. More than half of the leaders surveyed (57%) said this initiative is important. This was most prominently seen in Southeast Asia (51%) and the renewable sector (79%).<\/p>\n

The increased focus on carbon emissions is an ESG trend<\/a> gaining velocity throughout Asia. Options can include improving shipping routes, using greener transport, and using eco-friendly packaging. These changes reduce a company’s carbon footprint and help to protect the environment.<\/p>\n

Further evidence of decarbonisation commitment has emerged since our survey was conducted. The Carbon Border Adjustment Mechanism (CBAM) by the European Union (EU)<\/a> introduced its first phase of carbon reporting for importers. The EU’s implementation of the CBAM has shifted attention towards collecting data on carbon emissions within supply chain. In this first phase, importers will only have to report on scope 3 emissions, which are direct and indirect greenhouse gas emissions.<\/p>\n

4. Strengthening supplier and due diligence screening<\/h3>\n

One third of the leaders surveyed (33%) are focusing on improving supplier and due diligence screening protocols. This means being more careful when choosing suppliers based on strict ESG standards. It fosters a supply chain ecosystem that focuses on ethical and sustainable business practices.<\/p>\n

This initiative underscores a commitment to ESG principles across the supply chain. Organisations can choose to screen for suppliers who are committed to sustainability, fair labour, and transparent governance.<\/p>\n

5. Inclusive hiring practices for a more diverse workplace<\/h3>\n

Conscious hiring is helping some organisations improve diversity in their workforce and being incorporated into business strategies. Our survey indicates that more than a quarter (27%) of respondents are focusing on this initiative for their organisation.<\/p>\n

By actively seeking diverse talent, organisations contribute to social responsibility and foster a workplace that reflects varied perspectives and experiences. Inclusive employment practices not only enhance social aspects but also contribute to a more robust governance structure.<\/p>\n

6. Expanding product lines for global trade<\/h3>\n

The velocity of high-quality goods and services form an important part of the global economy. But companies who are more thoughtful about what they trade can help boost business and benefit society.<\/p>\n

Making and selling eco-friendly, ethically sourced, and fair-trade items will appeal to socially conscious buyers. Organisations help the environment and support fair labour practices by offering more products that people like. Almost two in five (18%) surveyed leaders actively focus on aligning with these sustainability standards.<\/p>\n

What else is on Asia’s radar?<\/h3>\n

ESG practices are extending to multiple departments across organisations, from the supply chain and beyond. Even investment decisions can affect a company\u2019s green track record.<\/p>\n

Active engagement with suppliers and stakeholders is creating a more socially responsible supply chain. The results translate into fairer labour practices, ensuring safer working conditions and addressing human rights throughout the supply chain.<\/p>\n

Companies in Asia are using frameworks that follow ethical standards, transparent reporting, and accountability. They are applying these principles to how they produce and deliver their products to consumers. It’s a comprehensive way to consider ESG factors in the supply chain. It helps the environment, society, and corporate governance practices in a positive way.<\/p>\n

ESG\u2019s regulatory landscape<\/a><\/h3>\n

As ESG rules grow, the stakes for risk management are getting higher. Bad actors in the supplier network, data privacy leaks and breaches are on the rise, and can strike at any moment. Increased exposure to these risks can affect companies who report on ESG. Many proactively incorporate conscious practices into global trade and supply chain operations as a result.<\/p>\n

The International Sustainability Standards Board (ISSB) released its first voluntary global sustainability disclosure standards in 2023. These standards are gaining prominence in ESG reporting with several countries planning to implement ISSB standards in national law.<\/p>\n

Hong Kong and Singapore regulators are among the first in Asia to adopt ISSB standards in their frameworks. Australia, Malaysia and Japan are making progress towards the same.<\/p>\n

How will AI impact ESG strategies?<\/h3>\n

Regulators are watching AI usage closely. As the technology becomes more mainstream, governance frameworks will include the responsible and ethical use of it. Companies who adopt trustworthy AI and technologies in global trade and the supply chain will reduce their risks.<\/p>\n

Overall, incorporating AI into ESG strategy helps businesses be more sustainable and socially responsible, and builds a more conscientious ecosystem. AI\u2019s capacity to reduce the risk of human error offers great potential for industries.<\/p>\n

\u201cAI is the catalyst for a paradigm shift in the region. Almost half of professionals (46%) believe that AI will greatly impact their organisation’s global trade or supply chain operations,” said Carl Olson, Vice President Proposition, Thomson Reuters Asia and Emerging Markets<\/p>\n

Download the ‘State of Asia\u2019s Position as a Global Trade Leader<\/a>‘ from Thomson Reuters. Whether you are a supply chain manager or head of logistics, the report includes the trends you need to know. Discover the ESG strategies and factors shaping Asia’s global trade future, so you can gain a competitive advantage for your organisation.<\/p>\n

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A new report by Thomson Reuters shows that ESG strategies are becoming more popular in Asia. 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