A volatile, uncertain, complex and ambiguous (VUCA) world presents both challenges and opportunities. One good example is the increased focus on Environmental, Social and Governance (ESG), which can be viewed as a barrier for growth or as a competitive advantage for countries. For countries to view ESG as a competitive advantage, there are three key opportunities to tap on. First, nations could collaborate on ESG technology, specifically on the development, deployment or building of ESG technological infrastructure. Second, nations could share best practices regarding their solutions to social issues such as social mobility. Third, nations could collaborate to harmonise ESG standards to promote trade between countries.
Policy Implications
To achieve an impactful and sustainable development process, Sino-ASEAN should embrace a whole-of-society approach to collaboration and innovation. For that to happen host governments need to implement the following:
- First, to leverage the technological growth of neighbouring countries, the collaboration between countries should not only involve government-to-government collaboration, but also involve the collaboration among the people, private, and public sectors (also known as 3P collaboration). To encourage 3P collaboration between nations, governments could develop policies to provide additional support for companies participating in international technical collaborations through tax incentive or partial funding of joint research projects on disruptive technologies.
- Second, to tackle the issue of inequality, nations should address social mobility through lifelong learning, particularly targeting underserved populations. To do so, governments can help subsidise further education for adult learners. They could also help shift the perception of education from being a paperchase to skills-upgrading.
- Third, to effectively shift mindsets to view ESG as a competitive advantage, we must have a clear business case. In this regard, as the government is a key driver in structuring the nation’s economy, the government must incorporate ESG into the national agenda. This will ignite and sustain an interest in ESG by the nation’s 3P sector. The government could also spearhead projects to develop frameworks that enable businesses to integrate ESG into their core business strategy or develop shared services to assist companies in the integration of ESG.
- Fourth, to harmonise the ESG standards, there needs to be a clear understanding of the South-East Asian region and its key markets. This would require multi-national collaboration to create a South-East Asia specific ESG standard, and thus would require ongoing diplomacy between nations within the ASEAN region. ASEAN could create a regional task force to help develop and align the ESG frameworks.
Photo by Anastasia R