Euromonitor report: COVID-19 to Slow Sustainability But Create New Opportunities In Southeast Asia
Friday, November 27th, 2020
According to a new global market research company Euromonitor International report on sustainability in Southeast Asia, Coronavirus (COVID-19) and the resulting reprioritisation of resources may slow the sustainability push in the short term, however there are opportunities to improve business efficiency through sustainability.
Opportunities for sustainably in Southeast Asia
The sustainability scene in Southeast Asia (SEA) is booming, aided by increased awareness among millennial and Generation Z consumers and a growing recognition of the benefits of adopting sustainable business models. However, SEA still lags behind regions like Western Europe and North America, which are at the forefront of sustainability.
Sustainability efforts in SEA face challenges from low cost manufacturing and consumer price sensitivity, along with a lack of awareness and regulatory support, which prove to be key barriers for companies investing in areas like supply chain transparency and sustainable sourcing.
Furthermore, the COVID-19 pandemic has resulted in reprioritisation of resources which may slow the sustainability push in the short term—with cost-saving measures becoming a priority, often at the expense of sustainability.
On the bright side, trans-national supply chain disruptions caused by the pandemic also mean new potential opportunities for going local. In SEA, this translates to greater sustainability opportunities in areas like agriculture and manufacturing, especially with the increased emphasis on sustainable sourcing and the growing role of technology in advancing sustainability.
Euromonitor has identified six sustainability focus areas:
- Supply Chain Transparency
With fewer economic incentives and less stringent legislation towards full disclosure, companies in Southeast Asia are behind global players when it comes to supply chain transparency. During the outbreak, sustainability and transparency efforts inevitably took a back seat. However, as the worlds reopens, there is a huge possibility more SEA companies are likely to embrace sustainability strategies, with greater adoption of international sustainability code of conducts such as GRI and increased use of standards and certification to gain trust and credibility.
- Sustainable Sourcing
Despite its rich forest cover and biodiversity, with Asia Pacific being home to nearly 15 percent of the world’s tropical forests, the region still lacks strong preservation policies. However, companies are companies accelerating investments in sustainable sourcing which will help in creating a strong ecosystem based on trusting and stable relationships.
- Water Scarcity
Water scarcity brings opportunities for innovation and collaboration with other industry players to create solutions with lower water footprints, with 44 percent of surveyed companies planning to invest in water-related sustainability strategies over the next five years (2020–2025).
- Technology Accelerating Sustainability
Using the right technology infrastructure and innovation can facilitate economic and environmental improvements, while efficiently using resources. For example, global plant-based meat alternatives and other players including ingredient companies have started to use food technology to develop other sustainable food sources such as insects.
- Circular Economy
Circular models provide businesses with greater efficiency, differentiation and better customer engagement in the increasingly sustainable-driven world. Southeast Asian countries are already on track, but to maximise the benefits, the public and private sectors need uniform standards for performance measurement that are applicable region-wide and a necessary part of intraregional organisations such as ASEAN.
- Net Zero Economy
Southeast Asia’s rising reliance on deforestation and coal power and energy-intensive industries have resulted in Indonesia, Malaysia, Philippines, Thailand and Vietnam contributing to over 90% of the region’s emissions. However, there are many possible strategies to pursue towards a low-carbon future including adequate policy regulations and market collaborative efforts.
Conclusion
Southeast Asia is highly vulnerable to environmental threats and the impact of climate change. At the same time, while the region’s growth trajectory has tumbled amid the ongoing COVID-19 pandemic, it is expected to grow rapidly from 2021 onwards. In order to survive in the new normal of prolonged post-COVID realities, companies need to move beyond the profit model and linear way of manufacturing goods to a purpose driven model and the circular economy.
The free report “Growth of Sustainability in Southeast Asia” has further insights into unique challenges of the region. To download it, click here.
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