Why progress beats perfection in safeguarding nature and biodiversity among Asean businesses | News | Eco-Business

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Spotlight</a> </span> </div> <div class="eb-article__headline-wrapper"> <h1 id="ebStoryHeadline" class="eb-article__headline" data-eb-story-headline="Why progress beats perfection in safeguarding nature and biodiversity among Asean businesses"> Why progress beats perfection in safeguarding nature and biodiversity among Asean businesses </h1> </div> <div class="eb-article__standfirst-wrapper"> <h2 class="eb-article__standfirst">Integrating nature and biodiversity into business practices is key to sustainable operations for Asean’s bioeconomy. However, the lack of pricing mechanisms and firmer regulations governing natural resources must see the region come together to address such challenges.</h2> </div> <div class="eb-article__media"> <figure class="eb-article__featured-image"> <img src="https://eco-business.imgix.net/ebmedia/fileuploads/APRIL_Production_Protection_1_1.JPG?ar=16%3A10&auto=format&fit=crop&ixlib=django-1.2.0&q=85&width=320" alt="RGE-plantation" srcset="https://eco-business.imgix.net/ebmedia/fileuploads/APRIL_Production_Protection_1_1.JPG?ar=16%3A10&auto=format&dpr=2&fit=crop&ixlib=django-1.2.0&q=45&width=320 640w, https://eco-business.imgix.net/ebmedia/fileuploads/APRIL_Production_Protection_1_1.JPG?ar=16%3A10&auto=format&fit=crop&ixlib=django-1.2.0&q=85&width=700 700w, https://eco-business.imgix.net/ebmedia/fileuploads/APRIL_Production_Protection_1_1.JPG?ar=16%3A10&auto=format&dpr=2&fit=crop&ixlib=django-1.2.0&q=45&width=480 960w, https://eco-business.imgix.net/ebmedia/fileuploads/APRIL_Production_Protection_1_1.JPG?ar=16%3A10&auto=format&dpr=2&fit=crop&ixlib=django-1.2.0&q=45&width=700 1400w, https://eco-business.imgix.net/ebmedia/fileuploads/APRIL_Production_Protection_1_1.JPG?ar=16%3A10&auto=format&dpr=2&fit=crop&ixlib=django-1.2.0&q=45&width=1100 2200w" sizes="(min-width: 1300px) 1100px, (min-width: 740px) 700px, 100vw"> <figcaption id="eb-article-featured-image-caption" class="eb-article__featured-image__caption"> RGE follows a "production-protection" model where the company forms “buffer zones” with its plantations around conservation areas to prevent illegal encroachment and protect flora and fauna. 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class="eb-share__shortlink-copy"> <span class="eb-normalise-visually-hidden">Copy</span> <svg xmlns="http://www.w3.org/2000/svg" width="16" height="16" viewBox="0 0 16 16" class="eb-icon eb-icon-search "><path fill-rule="evenodd" d="M5.75 1a.75.75 0 00-.75.75v3c0 .414.336.75.75.75h4.5a.75.75 0 00.75-.75v-3a.75.75 0 00-.75-.75h-4.5zm.75 3V2.5h3V4h-3zm-2.874-.467a.75.75 0 00-.752-1.298A1.75 1.75 0 002 3.75v9.5c0 .966.784 1.75 1.75 1.75h8.5A1.75 1.75 0 0014 13.25v-9.5a1.75 1.75 0 00-.874-1.515.75.75 0 10-.752 1.298.25.25 0 01.126.217v9.5a.25.25 0 01-.25.25h-8.5a.25.25 0 01-.25-.25v-9.5a.25.25 0 01.126-.217z"/></svg> </button> </div> </ul> </div> </div> <div class="eb-article__meta"> <div class="eb-article__sponsor"> <h3 class="eb-article__sponsor__title"><a href="https://www.rgei.com/" target="_blank" rel="noopener sponsored">Brought to you by:</a></h3> <a href="https://www.rgei.com/" target="_blank" rel="noopener sponsored">RGE</a> </div> <div class="eb-article__byline"> <div class="eb-article__byline__author"> <div class="eb-article__byline__author-name"> By <a class="author-link" href="/about/profile/45568/">Jeremy Chan</a> </div> </div> <div class="eb-article__meta__time"> 8 minute read <span class="eb-article__meta__divider"></span> <time class="eb-article__byline__publish-date" datetime="May 7, 2024, 4:35 p.m.">May 7, 2024</time> </div> </div> </div> <div class="eb-article__body"> <section class="eb-article__body-content"> <p>For the Asean region to achieve any decarbonisation in the near- and long-term future, nature must be factored into the equation. </p> <p>This, highlighted M Sanjayan, chief executive officer of Conservation International, is key to ensuring sustainable business practices – especially among companies that operate in the bioeconomy. </p> <p>“Achieving the target of limiting global warming to 1.5 degrees Celsius set in the Paris Agreement is only possible with the inclusion of nature,” he added, noting that the region’s large populations, rapid growth, and rich biodiversity, make it particularly crucial for Asean to “lead” in tackling climate change and biodiversity loss, and not merely participate. </p> <p>Sanjayan was among four panellists speaking at a partner event during <a href="https://www.ecosperity.sg/en/events/ecosperity-week-2024.html">Ecosperity Week 2024</a>, a sustainability summit organised by Singapore investment company Temasek. The session “Asean – Leading the Net-Zero Bioeconomy” was hosted by resource-based group of companies RGE and moderated by Jessica Cheam, founder and managing director of Eco-Business. The panel also included Bey Soo Khiang, vice-chairman, RGE, Theresa Mundita Lim, executive director, ASEAN Centre for Biodiversity (ACB), and Joris Dierckx, regional head for Southeast Asia, BNP Paribas.</p> <p>A bioeconomy refers to an economy that uses renewable biological resources from land and sea, such as crops, forests, fish, animals and micro-organisms, to produce food, materials, and energy. This can include materials made from pulp and paper materials sourced from sustainably managed forests. </p> <p>Various sectors can make up the region’s bioeconomy, such as those in agriculture and agribusiness, forestry and wood products, aquaculture and fisheries, biotechnology and bioenergy, and waste management, to name a few.</p> <p>This sees Asean’s bioeconomy employing more than 8 per cent of the global workforce and generating <a href="https://www.frontiersin.org/articles/10.3389/fsufs.2022.998594/full">US$2.3 trillion annually</a>, with growth set to increase.</p> <p>Growing demand from consumers for sustainably-produced goods, however, is pushing companies to rethink how products can be made without posing a risk to the environment, with a <a href="https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/the%20state%20of%20fashion%202020%20navigating%20uncertainty/the-state-of-fashion-2020-final.pdf">survey</a> from McKinsey & Co. reporting that 66 per cent of all respondents note that they consider sustainability when they make a purchase. </p> <p>The region’s rich biodiversity also presents a compelling case for more sustainable long-term business practices. Asean is home to around <a href="https://environment.asean.org/nature-conservation-and-biodiversity/about">20 per cent</a> of the world’s known plant and animal species, despite only comprising 3 per cent of the planet’s land area, and faces <a href="https://asean.chm-cbd.net/richness-biodiversity-asean-region">significant biodiversity loss</a> due to threats such as habitat loss, invasive species, climate change, pollution, and overexploitation.</p> <p>Forests, which cover <a href="https://www.fao.org/state-of-forests/en/">over 30 per cent of the global land area</a>, are particularly important as they are home to a vast majority of the world’s wildlife species, including 80 per cent of the planet’s amphibians, 75 per cent of all birds, and 68 per cent of mammals.</p> <p>How the region’s bioeconomy can grow sustainably all while protecting biodiversity, and whether nature can eventually be “priced”, was discussed during the panel.</p> <h4><strong>Responsible for growth</strong></h4> <p>As a large producer of bio-based products, Bey was quick to highlight the group’s conservation efforts in response to a question on how RGE considers the bioeconomy and its role in addressing climate change mitigation.</p> <p>“As a big group of companies, we are conscious of our responsibility in ensuring that we develop our business responsibly and that the tone is set from the founder himself, who fundamentally said as a company, you must do good for the community, country, climate, and customers,” he said. </p> <p>Bey exemplified RGE’s “production-protection” model, where the company forms “buffer zones” with its plantations around conservation areas to prevent encroachment and illegal logging and protect flora and fauna. The group, he added, also has a 1-for-1 commitment to conserve and restore one hectare of natural forest with every hectare of plantation managed.</p> <p>RGE adopted a no-deforestation policy in 2015 and also educates villagers on <a href="https://www.rgei.com/sustainability/climate-stewardship">sustainable land clearing</a>, Bey said. </p> <p>Dierckx chimed in with perspective from the banking sector, noting that financial institutions like BNP Paribas now have policies in place to help employees better discern between companies operating in “sensitive” sectors and help the bank to allocate capital responsibly.</p> <p>“We have policies for pulp, paper, and palm oil, which define the criteria for collaborating with companies in these industries,” he said. The bank, Dierckx added, also has a mining policy that sets standards for supporting the mining industry in countries such as Indonesia and Australia, considering factors like deforestation and community rights. </p> <p>“When allocating capital and channeling funding, financial institutions have come a long way in that we no longer engage with clients, corporations, or institutions that do not adhere to global conservation standards, non-pollution, and similar principles,” he noted.</p> <p>The bank now conducts environmental, social and governance (ESG) risk assessments among all clients to evaluate their ESG risks, their risk management and mitigation strategies, and their ability to transform these risks into opportunities, he noted. </p> <p>“It’s crucial that we incorporate ESG aspects into our reasoning and analysis. In the future, we hope to price natural capital and be able to quantify its positive impact,” Dierckx said. </p> <h4><strong>Progress in the region</strong> </h4> <p>There are currently a handful of regulations to protect nature and biodiversity in Asean.</p> <p>The Indonesian government, for example, issued a <a href="https://www.reuters.com/article/us-indonesia-environment-forest-idUSKCN1UY14P/">permanent moratorium</a> on new forest clearance for activities such as palm plantations or logging in 2019, and there are <a href="https://www.tandfonline.com/doi/full/10.1080/14442213.2019.1670246">regulations</a> in place for indigenous communities to acquire legal rights to traditional lands. </p> <p>Malaysia has <a href="https://www.theborneopost.com/2018/09/21/malaysia-committed-to-maintain-over-50-natural-forest-cover/">pledged</a> to keep at least 50 per cent of its land area under natural forest cover, while the Philippines has <a href="https://www.philstar.com/headlines/climate-and-environment/2023/06/27/2276990/denrs-reforestation-goal-2m-hectares-land-during-marcos-admin">promised to replant trees</a> on all remaining degraded former forestlands by 2028.</p> <p>While there are policies in place, there are also challenges in the region and the need for governments to create jobs and meet economic objectives.</p> <p>Lim of ACB noted her hopes for nature and biodiversity to take greater precedence among businesses, highlighting a Memorandum of Understanding (MoU) that was signed by the ACB and the Asean Business Advisory Council (Asean-BAC) in September 2023. </p> <p>The partnership aims to <a href="https://mirror.pia.gov.ph/press-releases/2023/09/04/asean-bac-acb-ink-partnership-on-business-and-biodiversity">boost biodiversity and sustainability mainstreaming</a> in business operations across Southeast Asia, particularly in the carbon trading market and in adopting nature-based solutions to climate change.</p> <p>“Through this MoU, several priorities have been identified, and discussions regarding incentives have already taken place,” Lim said, noting that the agreement aims to also spur climate-focused and biodiversity-friendly investments in the region.</p> <p>Lim, however, also stressed the need for improved policies that could responsibly put a price on nature.</p> <p>“We need to establish policies that recognise the value of biodiversity to encourage more investment in biodiversity protection. Research and academic institutions should also be engaged to identify the real economic, social, and cultural value of our nature and biological diversity,” she said.</p> <blockquote> <h2 class="quote">“</h2> <p>Within the context of sustainability, it’s often better to be heading in the right direction than to be 100 per cent correct.</p> <p class="quote-credit">Bey Soo Khiang</p> </blockquote> <h4><strong>Long-term viability</strong></h4> <p>Since companies operating in the bioeconomy rely on natural resources, transparency and open channels of communication are key to sustainable, long-term operations, Bey highlighted, as they allow businesses to correct their course.</p> <p>With RGE having received its <a href="https://www.eco-business.com/news/scrutiny-from-financiers-and-ngos-on-sustainability-and-no-deforestation-efforts-welcome-rges-bey-soo-khiang/">share of scrutiny</a> from non-governmental organisations (NGOs) and environmental groups over their no-deforestation commitment, establishing open communication channels – and inviting NGOs to voice their concerns – can help build a relationship based on transparency and accountability, Bey noted.</p> <p>“When we receive complaints from NGOs, we listen to them, we ground-truth it and verify whether they are true or not – if it is true, we are corrected and try to remedy the issue right away. We try to create a relationship that allows for open communication,” Bey said, adding that companies in the bioeconomy can also form independent advisory committees to receive more objective feedback.</p> <p>He pointed to RGE’s <a href="https://www.aprildialog.com/en/2023/12/05/aprils-fire-free-village-programme-fostering-a-fire-resilient-community/">Fire Free Village Programme</a>, an initiative to encourage villages to adopt a zero-burning approach in managing their lands and plantations, which he noted has maintained steady operations through continuous engagement with the communities involved. </p> <p>Sanjayan touched upon Bey’s point on the “production-protection” model, noting how the method can help companies conserve nature all while maintaining operations. “By linking production with protection, businesses have a vested interest in safeguarding natural resources,” he noted.</p> <p>He referenced <a href="https://www.conservation.org/press-releases/2022/11/14/ocean20-a-new-self-funded-marine-resource-management-framework">Blue Halo S</a>, a project launched by Conservation International with the Indonesian Government, non-profit Konservasi Indonesia, and climate financing entity Green Climate Fund, which invests income from sustainable fisheries into environmental protection efforts.</p> <p>“As revenue increases from fisheries, that can also be allocated to the conservation of marine protected areas, which allows for sustainable production,” Sanjayan explained. </p> <h4><strong>Challenges ahead</strong></h4> <p>Until there are systems to “price” nature in the region, government policies will be necessary to ensure the sustainable use of natural resources, Dierckx noted in response to a question on whether banks can ensure that nature financing reflects the true value of nature and biodiversity.</p> <p>“There is currently no mechanism to accurately price natural capital and ecosystem services, so government regulation is necessary. For example, palm oil is not always accurately priced. It is important to ‘internalise’ these externalities through regulation, as they are not valued in the neoclassic pricing model. So, there is still a long way to go in this process,” he said. </p> <p>Sanjayan added how, unlike carbon – which has a uniform price regardless of where it is emitted – nature and biodiversity cannot easily be priced due to a lack of “fungibility” or the ability to be replaced by another identical item.</p> <p>“For example, the price of a [protecting] a tiger in Sumatra is different from the price of [protecting] a tiger in India or Texas,” he said. “While it is possible to price biodiversity in specific locations, there is currently no agreed-upon mechanism to replace biodiversity in one place with biodiversity in another place.”</p> <p>However, pricing challenges should not impede progress, Bey added, as there are greater costs that come with inaction. “Within the context of sustainability, it’s often better to be heading in the right direction than to be 100 per cent correct,” he argued. </p> <p>“For example, if we determine that US$1 per ton of wood brought to the mill is a reasonable starting point to fund our conservation activities, we can proceed with that. If it’s not sufficient, we can adjust it accordingly,” Bey said.</p> <p>“As such, we don’t wait for perfection but aim for around 80 per cent accuracy before taking action. This mindset applies to working with NGOs, where taking action in the right direction is often more significant than having a perfect solution.”</p> <h4><strong>Moving the needle</strong></h4> <p>Asean must ultimately come together to protect natural resources and biodiversity, Lim said, noting that greater collaboration among member states can drive positive change in the absence of a pricing or valuation system for nature.</p> <p>“We need to strengthen coordination within the region and see what policies can work across all 10 member states. This is how we can contribute at the global level. But first, we need to come up with policies to promote investments for biodiversity protection.”</p> <p>Greater collaboration among member states, Bey added, would also ensure better biodiversity protection by preventing illegal wildlife trade.</p> <p>Asean governments, Dierckx concluded, should rely on sustainable finance to fund conservation. “While regulations, public policies, and mobilisation of civil society are necessary, I believe that Asean governments can issue green bonds or other financial instruments to finance the necessary investments,” he said.</p> <p>“Currently, much of the burden falls on the government, as there is no market pricing for these initiatives. 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Why progress beats perfection in safeguarding nature and biodiversity among Asean businesses | News | Eco-Business | Asia Pacific