My Say: Sustainable finance a lever for growth

My Say: Sustainable finance a lever for growth

Arina Kok of The Edge Malaysia in My Say: Sustainable finance a lever for growth, demonstrates how sustainability should be omnipresent in all development plans thinking as well as implementation.

Recent studies show that future years will be hotter than ever, and growing pressure from all sides to go beyond beautifully designed sustainability reports would be a must.
Consumers and suppliers ought not to just value sustainability; they should prepare to pay for it. For instance, assets in dedicated sustainable investment strategies went over $1 trillion by June 2020.

In January, the country was badly hit by floods that displaced nearly 50,000 people. This exacerbated the impact of Covid-19 on struggling businesses, livelihoods, the healthcare system and the economy.


My Say: Sustainable finance a lever for growth

The pandemic aside, the Malaysian economy had suffered RM8 billion worth of damages, owing to climate-related events between 1998 and 2018. Given the rising magnitude and frequency of climate risks and their impact on businesses and society, the call to action is clear — strong cooperation between financial institutions and policymakers, businesses and society will be critical to drive the coordinated transition to a resilient and low-carbon economy.

To accelerate the transition, increased mobilisation of sustainable finance is needed to fund mitigation initiatives such as clean energy, energy efficiency and sustainable transport, and adaptation initiatives such as disaster management, infrastructure upgrade and sustainable land use.

Sustainable finance can be defined as any form of financial service that incentivises the integration of long-term environmental, social and governance (ESG) criteria into business decisions, with the goal of providing more equitable, sustainable and inclusive benefits to companies, communities and society.

While negative screening, such as absolute avoidance of activities, and thematic investing in selected sectors, such as clean energy, are commonly practised in sustainable finance, there is also a growing focus on diversifying sustainable financial practices into three other areas:

  •     ESG integration — incorporating ESG information and analysis into investment decisions with the objective of enhancing risk-adjusted returns;
  •      Impact investing — targeting positive measurable ESG impact alongside financial returns; and
  •      Norm-based screening and best-in-class (positive) screening according to defined ESG criteria.

Risk aside, climate change also presents opportunities to increase the range of financial products and services for renewable energy, green buildings and climate-smart agriculture and cities. The International Energy Agency projects the need for US$3.5 trillion (RM14.4 trillion) in annual global investments to build the infrastructure for a green economy.

Our World in Data, publisher of research and date of the world’s largest problems, found that the cost of solar and wind power plummeted at a staggering rate between 2009 and 2019, with the price of new solar falling by 89% and the price of onshore wind by 70%. It is now cheaper to invest in new renewables than in new coal power in every major energy market in the world, and soon it will be cheaper to build new renewables than to continue operating existing coal plants.

As markets advance in factoring ESG into risk-adjusted returns and more sustainable funds build competitive performance records, the lingering doubts about sustainable finance will diminish. According to S&P Global Trucost, over the past six years, the Standard & Poor’s 500 SDG (Sustainable Development Goals) portfolio increased by 136.2%. This compares with the S&P 500 portfolio, which generated a return of 125.8%. The research also indicated that companies with a higher proportion of their revenues coming from SDG-related products and services tend to outperform those with a lower proportion of their revenues.

Challenges

The challenges in driving sustainable finance lie in having a clear direction and incentives to pivot from traditional investing strategies. The availability of quality ESG information is also an ongoing challenge, as most businesses are at different maturity levels in managing and reporting on ESG practices. While regulatory and market standards continue to be developed, a coordinated transition requires a system-wide engagement and effective reporting policies to be implemented.

In response to the need for common industry standards and frameworks, Bank Negara Malaysia is collaborating with the local financial industry to issue Value-based Intermediation Financing and Investment Impact Assessment Framework (VBIAF) guides for the different sectors.

The sectoral guides will facilitate the practical implementation measures pursued by the Joint Committee on Climate Change, including the Climate Change and Principle-Based Taxonomy that will be finalised soon. The first set of VBIAF sectoral guides on palm oil, renewable energy and energy efficiency was issued on March 31, while the second set for the oil and gas, manufacturing, construction and infrastructure industries will be issued by year end.

The right strategy

With increasing pressure from the regulators, investors, organisations and society need to clearly define their sustainable finance strategies, resilience to emerging risks and their role in the global transition to the green economy. Successful sustainable finance strategies will be those that are actionable.

Setting the right strategy starts with defining just where and how organisations should engage in sustainability. It is not just a matter of figuring out the right policies, but of identifying the right actions to make sustainable finance a lever for growth. The board and senior management will have to think about the organisation’s purpose and mission. The right answers will help define sustainability goals that suit the organisation — those that are measurable, authentic, achievable, meaningful and aligned with stakeholders’ needs.

The right strategy is essential because greening the economy has huge potential upsides and may be the greatest commercial opportunity of our age.

This article first appeared in Forum, The Edge Malaysia Weekly of 10 to 16 May 2021.


Arina Kok is a director of Ernst & Young Advisory Services Sdn Bhd’s climate change and sustainability services (CCaSS) practice. The views expressed are those of the author and do not necessarily reflect the views of the global EY organisation or its member firms. This is the second of a three-part series on sustainability in conjunction with Earth Day 2021.

Developing Capacities Of UNESCO Designations For Sustainable Development

Developing Capacities Of UNESCO Designations For Sustainable Development

India Education Diary Bureau Admin in Developing Capacities of UNESCO Designations For Sustainable Development informs that there could be no future without focusing on the nexus between heritage and the creative economy. In a move to help in that direction, UNESCO designated sites to the proclamation of 2021 as the International Year of Creative Economy for Sustainable Development.

Developing Capacities Of UNESCO Designations For Sustainable Development

The Fondazione Santagata for the Economics of Culture has just released the report of a survey conducted with the support of the UNESCO Regional Bureau for Science and Culture in Europe, in order to assess the impact of the first 5 workshops conducted under the initiative “International Academy on UNESCO Designations and Sustainable Development” (2015-2019). During this fruitful experience, the Academy convened approximately 130 professionals working for UNESCO designated sites from about 50 countries across the world and generated evident positive impact on capacities to contribute to local sustainable development, both directly and indirectly.

The International Academy on UNESCO Designations and Sustainable Development is a capacity-building programme conceived and launched in 2015 by the Santagata Foundation for the Economics of Culture and UNESCO through its Regional Bureau for Science and Culture in Europe, as part of the interdisciplinary and intersectoral programme of the latter.

The International Academy aims to contribute to the achievement of the Sustainable Development Goals of the 2030 Agenda through strengthening the capacities of managing authorities and other local practitioners working with UNESCO designations, with special focus on World Heritage properties, Biosphere Reserves, Global Geoparks, elements inscribed in the Lists for Intangible Cultural Heritage, and Creative Cities. The project was made possible thanks to the annual contribution of Italy to the UNESCO Regional Bureau for Science and Culture in Europe.

So far, 5 yearly international workshops have been organised since 2015, with the exception of 2020 due to the COVID-19 outbreak. Held primarily in Turin and the Piedmont region, with an interactive programme combining lectures, group works and meetings with stakeholders in local real-case scenarios, these workshops saw the attendance of a diverse group of participants from the European region and beyond, creating a community of professionals and incrementing their skills and understanding on how to foster sustainable development in UNESCO designated sites through the integrated management of cultural and natural resources.©Fondazione Santagata. Mont-Viso Transboundary Biosphere Reserve

In response to the disruption of the Academy’s regular activities due to the COVID-19 pandemic in 2020, the UNESCO Regional Bureau for Science and Culture in Europe and the Santagata Foundation launched an in-depth survey to evaluate the impact of the workshops held in previous years, aimed at participants and local partners involved. The outcomes of the survey were analysed and presented in a technical report, which offers evidence of the positive impact of the Academy especially in terms of knowledge advancement, networking and regional cooperation.© UNESCO

The Academy experience helped participants to envisage and pursue new partnership opportunities in their respective local contexts at different levels: within the governance framework of single designated sites; across different policy sectors (e.g. culture, environment, tourism, agriculture, creative economy); between different designations in multi-designated areas or in close territorial proximity; as well as between different designated sites in different countries or territorial contexts.

The responses of participants also attest to the importance of the Academy in improving advancing participants’ knowledge on UNESCO designations and related processes; enhancing their professional capacities; sharing good practices; supporting peer learning, and eventually promoting the introduction of new operational measures or policies in the concerned designated sites.©Fondazione Santagata. Residences of the Royal House of Savoy, Pollenzo – UNESCO World Heritage

One of the key findings of the survey is that none of the selected UNESCO designated areas were immune to the heavy socio-economic effects of the COVID-19 pandemic, highlighting the necessity to develop appropriate responses to the crisis in the sense of sustainably leveraging cultural and natural assets for recovery. This was reflected in the capacity-building priorities that the respondents indicated for future workshops of the Academy, focusing especially on: i) how to effectively sustain economic growth while ensuring social and environmental sustainability; ii) increasing the preparedness, resilience, and recovery of the sites in face of emergencies; iii) supporting the construction of a strategic, integrated, and participatory management framework with a view to achieving middle and long-term objectives.

On this basis, the UNESCO Regional Bureau for Science and Culture in Europe, together with Fondazione Santagata are working to prepare the 6th workshop of the Academy, which is tentatively scheduled in October 2021 and will focus on the nexus between heritage and the creative economy in UNESCO designated sites, in the wake of the proclamation of 2021 as International Year of Creative Economy for Sustainable Development.

A summary of the survey report is available here: https://unesdoc.unesco.org/ark:/48223/pf0000376137

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Upsizing could become key travel trend

Upsizing could become key travel trend

With the advent of the pandemic and its ensuing lockdown, life changed for the many peoples of the UAE. But of all aspects of life, travelling is to do with remote working and all its direct consequences reviewed here. So despite the Grim short-term Forecast for the Coronavirus-era Economy why upsizing could become a significant travel trend?

Upsizing could become key travel trend, says study

DUBAI, Financial situations worsening for consumers has been widely discussed amid the Covid-19 pandemic. However, many consumers managed to bypass this financial squeeze and have incidentally become efficient savers. 

Upsizing could become key travel trend

This trend should not be overlooked by tourism companies which need to realise that not all travelers will be wanting a budget-friendly option for their next holiday, says GlobalData, a leading data and analytics company.

With saved cash that has accumulated during the pandemic, many travellers may be planning to spend more than usual on their next trip. 

According to GlobalData’s survey, when global respondents were asked if they were concerned about their personal financial situation, 13% stated that they were ‘not concerned’. Although this is still significantly less than the 34% that stated they are ‘extremely concerned’, it means that over one in ten of the global travel market could be financially unaffected by the pandemic and have even saved a considerable amount.

Ralph Hollister, Travel and Tourism Analyst at GlobalData, comments: “Many of the travellers that make up this 13% are likely to be white-collar workers that can work effectively at home. Due to spending the vast majority of their time being confined to their homes in the past year, the urge to travel would have built up. This urge, combined with a significant increase in savings, could mean that many of these travellers will have developed a ‘treat yourself’ mentality, to combat the impact of the pandemic which has increased boredom and frustration for many. This mentality could be present as these consumers start planning their next holiday, which could result in them spending more on room upgrades, business class flights and higher quality rental vehicles.

“As well as saving money on commuting, eating out and on other recreational activities, many of these consumers who have been unaffected by the pandemic have also saved by not booking a holiday last year, or by having their cancelled trip refunded. This could mean that for their next trip, they will go bigger and better on more luxurious travel services and products. This trend could also be driven by a ‘now or never’ mentality, as when travellers have the opportunity to go on holiday, they will spend significantly more and stay for longer in case another situation like the Covid-19 pandemic reoccurs,” Hollister said.  –TradeArabia News Service

Sustainable architecture: innovative and inspiring building design

Sustainable architecture: innovative and inspiring building design

From amazing abodes to centres of care and hard-working offices, we chart some of the world’s best examples of sustainable architecture, buildings that not only look good but also do good. Here is sustainable architecture in innovative and inspiring building design throughout the world as brilliantly covered in this pictures and text article.

The picture above is of the Elephant Museum.

Sustainable architecture: innovative and inspiring building design

Elephant World by Bangkok Project Studio

Brick Observation Tower

Photography: Spaceshift Studio

Elephant World’s architecture nods to both human and elephant needs, showcasing a strong sense of social sustainability but a respect to the environment too. The Wallpaper* Design Awards 2021 Best Sanctuary winner is a design by Thai architect Boonserm Premthada and his practice, Bangkok Project Studio. Premthada worked with local labour and materials to create a complex dedicated to the wellbeing of humans and animals, including an observation tower, a museum and a multifunctional event space. The design blends with the landscape and uses natural materials. For example, the bricks used for the museum were created on-site by local workers using loam found in the area. bangkokprojectstudio.co

Powerhouse Telemark by Snøhetta

Powerhouse Telemark Snohetta

This ultra-sustainable workspace is a building that actually creates more energy than it will consume over its entire lifespan. Architecture studio Snøhetta, together with collaborators R8 Property, Skanska and Asplan Viak, has recently completed the project, Powerhouse Telemark, the fourth energy-positive building in its Powerhouse portfolio. Located in the city of Porsgrunn, the project creates much needed office space. It features solar panels on its roof; natural shading is promoted, while plentiful insulation ensures heat is retained where possible; and heat is stored in the building elements, to be released slowly, while a geothermal well supports heating and cooling. As a result, Powerhouse Telemark was awarded a BREEAM Excellent certification. snohetta.com

Anandaloy by Studio Anna Heringer 

Obel Prize WINNER 2020 Anandaloy by Anna Heringer

German architect Anna Heringer’s Anandaloy project in rural Bangladesh is a successful example of sustainable architecture, both in terms of social and environmental responsibility. The community centre and textile workshop in rural Bangladesh contains a therapy hub for people with disabilities on the ground floor and a fair-trade textile manufacturing workshop for local women on the first floor. Made out of rammed earth and bamboo, the structure explores age-old local building techniques and materials in soft curves and textures that connect with its place and the region’s vernacular. The building recently scooped the prestigious. Obel Award for 2020anna-heringer.com

Treehouse by Olson Kundig

Photography: Nic Lehoux

US architect Tom Kundig, of Seattle practice Olson Kundig, is behind this sustainable teak holiday house in Costa Rica. Called the Treehouse, the private home is built predominantly out of locally harvested teak, and is open to the elements. This makes sense for Kundig’s clients for two reasons: as avid surfers, it gives them a chic version of a basic surfer’s hut; and as environmentalists, their new home ticks a number of sustainability boxes. Spanning three floors, the building is designed to operate passively, and slatted panels keep it open to the outdoors. ‘Our aim was to create a home that is very leaky to the view and light and air,’ says architect Tom Kundig. The structure also has its own rainwater collection system. olsonkundig.com

Additional writing: Clare Dowdy

Bahareya Village by ECOnsult

 Bahareya vilage

Egyptian architect Sarah El Battouty, head of local studio ECOnsult, led the sustainable design of Bahareya Village, an eco-friendly compound for farm workers in the country’s Western Desert. Created to be home to the farming community engaged by organic tea producer Royal Herbs, the complex uses gravel manufactured from recycled construction waste for the base of its minimalist concrete structures. Cacti scattered throughout the campus offer splashes of greenery without compromising on a commitment to water efficiency. And a technique El Battouty borrowed from desert communities – raising the foundations of the buildings to create distance between the floor and therefore the rising heat from the land – reduces indoor temperatures by eight to ten degrees. econsultarch.com

Additional writing: Ijeoma Ndukwe

Cold Spring Residence by Alloy

Della Valle retreat

Photography: Richard Barnes

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Copper Hill by BIG 

Aerial view of the Amager Resource Center in Copenhagen

Photography: courtesy of Amager Resource Center

The Amager Resource Center in Copenhagen, also known as Copenhill, is one of the city’s latest initiatives that put climate action to the forefront. Designed by the Bjarke Ingels Group (BIG), the building is essentially a rubbish burner; yet it’s also so much more than that. The structure houses an artificial ski slope, recreational hiking area and climbing wall on top of the waste-to-energy plant. Built using aluminium blocks, this piece of infrastructure aims to treat 400,000 tonnes of waste annually. The result is supplying 150,000 Danish households with district heating and 70,000 with electricity from non-recyclable waste. big.dk

Flying House by Martand Khosla

Photography: Edmund Sumner

Created by architect Martand Khosla for a Delhi-based family of four, this weekend retreat in India’s Dharamshala is rooted in traditional materials and techniques. Set between farmland and a lush forest on the Dhauladhar mountain ranges of the Himalayas, Flying House has been built using local resources – stone, stabilised mud brick, slate and pine. A lot of the earth and stone dug out from the site during the foundation excavation went back into the construction. Building site wastage was minimised and a lot was recycled, making this house quite literally of its place. The construction uses stabilised mud brick, a method local workers were taught, using equipment from Development Alternatives (a social enterprise for sustainable solutions in India). This way, not only would the local stonemasons be able to build this particular house, but they would be able to master the craft and continue using it in the future. rk-ds.com



Colluding With the Corrupters

Colluding With the Corrupters

Michael Young in an interview, with David Linfield who argues that international donors are benefiting existing power structures in the Middle East. It is all about Colluding With the Corrupters.

Preamble

Corruption spread deep and for some time in the MENA region with social, political, and economic implications, but with differing penetrations rates. All because the area can divide into two types of governance. The autocratic monarchies live with side by side with the so-called republics. Few of these latter countries know a higher degree of corruption than the first-mentioned countries. In any case, all have made the fight against corruption a priority by passing laws and adopting strategies to combat crime. But in vain.
Colluding with the Corrupters could quickly summarise a situation where such deviant behavioural attitudes originators can be traced back out of the region.

  • January 29, 2021
Colluding With the Corrupters

David Linfield is a visiting scholar in Carnegie’s Middle East Program. He is on sabbatical from the U.S. Department of State, where he is a career foreign service officer. Linfield recently wrote a commentary for Carnegie, titled “International Donors Are Complicit in Middle Eastern Elites’ Game.” In mid-January, Diwan interviewed him to discuss his article, and more generally to examine the anti-elite feeling that has permeated protests throughout the Middle East in the past year, notably in Iraq, Jordan, and Lebanon. The views expressed by Linfield are his own and not necessarily those of the U.S. government.

Michael Young (MY): You’ve just written a commentary for Carnegie, titled “International Donors Are Complicit in Middle Eastern Elites’ Game.” What is your argument in the piece?

David Linfield (DL): My argument is that the United States and other international donors have put significant clout and resources behind promoting economic liberalization in the Middle East, while they have been hesitant to put similar emphasis on political reforms. By political reforms I mean boosting transparency, combating corruption, and empowering elected officials. International actors have partly justified this approach by suggesting that economic reforms are a better way of promoting stability and less risky than political changes. But I contend that recent events in the region suggest that these policies are making violent, sudden change in the region more likely, not less so.

When adopted in the context of authoritarian political systems, economic reforms such as privatization have tended to benefit existing power structures, exacerbating economic inequality and citizen-state tensions. The World Inequality Database now ranks the Middle East as the most unequal region in the world. While economic inequality has decreased worldwide since the 1990s, it has remained constant in the Middle East.

By supporting policies that have inadvertently led to such entrenched inequality, while neglecting political reforms, international donors have contributed to citizens’ frustrations with their relative economic status while leaving them without peaceful institutional means of expressing their grievances. This is all a recipe for instability, which is the opposite of what donors want.

MY: You write that “[e]merging solidarity among previously competing groups, grounded in [economic inequality]” is a feature of the growing resentment of elites in the Middle East. Are you suggesting, to borrow from Marxist jargon, that we are seeing the emergence of a sort of class consciousness in certain countries that may have revolutionary potential?

DL: Most of the protests in the Middle East since 2018 have focused on economic inequality and corruption. Whereas previous demonstrations in the region tended to consist of a homogeneous ethnic group—whether from a particular religious sect, region, or group of tribes—these recent protests have been more diverse.

Common frustrations with inequality appear to have led people from lower-income communities to demonstrate in common cause—albeit sporadically and tentatively—against what they see as a corrupt and multisectarian elite that has failed them. We have seen this happen most explicitly in Iraq, Jordan, and Lebanon.

Some of the slogans used in recent protests in these countries do indicate the emergence of class consciousness. When the Jordanian Teachers Union threatened to strike in summer 2020, they framed their plight as a class struggle against those who had “looted the country.” The 2019 Lebanese protests included slogans like “down with the rule of the thieves.” Iraqi protestors in 2019 and 2020 told media outlets that their struggle was about taking the country back from “thieves.”

MY: In light of your assessment, how have the traditional fault lines among Middle Eastern populations that regimes have manipulated to retain power—things such as sectarian, tribal, or regional divisions—fared in what you describe as a changing environment?

DL: The traditional fault lines in Middle Eastern societies are still very much present. Emerging class-based tensions have not fully supplanted preexisting divisions based on ethnicity, religion, and tribalism, but rather now coexist alongside them more than before. That said, the trendlines I described earlier suggest that class-based divisions will continue to grow in relative importance and have the potential to reshape existing political alliances and divisions.

In addition to the demonstrations I mentioned earlier, another indicator of the power of class solidarity is a 2019 experiment by researchers from the University of Pittsburgh and the Lebanese Center for Policy Studies. The study, which assigned hundreds of Lebanese people into different conversation groups having varying compositions based on sect and class, found that when Lebanese people gathered with other members of the same class, they exhibited markedly less support for sectarian politics.

It’s too early to craft a comprehensive assessment of how emerging class-based tensions will interact with longer-standing societal divisions in the Middle East. One reason that we’ll have to observe for a longer period is that Covid-19 shifted the focus dramatically from political and economic challenges to the health crisis. But given that the pandemic exacerbated economic inequality, with lower-income communities bearing the brunt of related economic disruptions, we probably won’t have to wait long before class discussions reemerge.

MY: If the problem is that economic liberalization has reinforced elites, what are you recommending as an alternative approach by Western donors? And what makes you think that such an approach would have any chance of working?

DL: The alternative approach I’m recommending is for international donors to incorporate measures to promote transparency and combat corruption into existing economic liberalization efforts. These political reforms are also good for business and economic growth—as noted by the International Monetary Fund (IMF) and World Bank reports I cite in my article. The IMF’s recent insistence that Lebanon address corruption before receiving additional loans is a positive step to putting teeth behind their analysis.

Other helpful steps would include pushing to empower the many weak legislatures across the region beyond their current rubber-stamp roles, which would provide an alternative to protests for frustrated publics. If international donors put the same clout behind good governance that they have behind economic liberalization, they’ll make peaceful and durable progress more likely in the Middle East.

MY: Are you not reading too much into anti-elite solidarity? Ultimately, states in the region have shown that they will resort to violence in order to survive and societies have often gone back to being silent. Why will this change?

DL: Ruling elites in the region have demonstrated that they are willing to go to extreme measures to maintain their benefits. I am not suggesting that elites will somehow decide that they should altruistically begin to share resources with the rest of society. Rather, as your question implies, I am arguing that the elite behavior of concentrating power and resources is an unsustainable strategy that will ultimately foment violence and harm everyone’s interests, including those of the elite.

Autocratic regimes tend to resort to violence when they feel they have run out of other options, but rely more often on nonviolent coercion and intimidation to maintain daily control. By the time regimes turn to violence, it tends to be a prelude to their loss of control—or a stage where they are nearing that.

The strategy of international donors focusing their influence and resources on economic liberalization instead of good governance has not succeeded in bolstering stability and strengthening citizen-state relations. Instead, the policy has exacerbated class-based tensions and increased the prospects of unrest.

These trends are not linear: demonstrations in the region against economic inequality and corruption have ebbed and flowed. Ruling elites remain intent on doing everything they can to outmaneuver these latest challenges to their vested interests. Longer-standing societal tensions based on sect, region, and tribe also continue to simmer and remain exploitable by elites. But the overall direction of the region is still toward economic liberalization in the midst of authoritarian entrenchment. As long as that remains the case anti-elite solidarity is likely to build. International donors are inadvertently contributing to these increasing citizen-state tensions. Instead, they could be fostering more durable change that would make the region more stable and prosperous for everyone.