A recent report by YCP Solidiance, an international consulting firm, highlights the ESG risks faced by most Southeast Asian nations as the recovery from the pandemic slows down. According to the report, Singapore stands out as the only country in the region with a low ESG risk score of 34.9.
On the other hand, Cambodia, Myanmar, and Laos have higher ESG risk scores of over 50, particularly concerning their sustainability targets. Thailand falls in the medium-risk category, scoring 43.1. In response, the Thai Energy Ministry has set ambitious goals, aiming to increase the share of renewable energy to 50% of the electricity generation mix by 2050, achieve carbon neutrality by 2050, and attain net-zero greenhouse gas (GHG) emissions by 2065.
The report underscores the substantial and interconnected ESG challenges confronted by the region, highlighting the importance of government coordination and alignment among Southeast Asian countries. Additionally, the survey conducted by YCP brings to light that companies in Southeast Asia are still trailing their American and European counterparts when it comes to achieving emissions reduction targets and reducing the percentage of carbon dioxide emissions.
Furthermore, the report reveals that only Malaysia (68.8%), Thailand (66%), and Singapore (58.6%) have a notable proportion of companies implementing environmental supply chain policies.
A joint report by Bain & Company, Temasek, and Microsoft in 2022 revealed that non-renewable sources contribute to 85% of the region's primary energy supply, while carbon dioxide emissions are projected to increase by up to 2,400 tonnes by 2040.
Despite governments in Southeast Asia committing to achieve net-zero emissions between 2050 and 2065 following the Paris Agreement, a 2022 UN report states that the region is not on track to meet any of the 17 sustainable development goal targets by 2030. The report attributes this shortfall to higher income levels in the region, leading to increased material footprint and consumption. Unsustainable consumption patterns have resulted in a significant rise in GHG emissions, exacerbating the climate emergency in the area.