sdg12 Sustainability Risk Management
sdg12 Sustainability Risk Management
sdg12 Sustainability Risk Management
Why now?
There is a growing body of evidence indicating that sustainability factors influence financial
returns and present an opportunity to drive long-term value. Over the last decade,
environmental, social and governance (ESG) risks have gained increasing attention,
particularly among investors, regulators, and customers. Today, some of the world's
largest organisations are seeking to proactively manage and report on their ESG risks and
to partner with or invest in “ESG ready” companies. Sustainability factors are part of the
fundamentals needed to attain higher returns, organisational resilience, and stakeholder
trust. Companies that neglect ESG risks do so at their own peril.
•• Brand differentiation
Ask yourself
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Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
Overview
Overview 05 Corporate sustainability, which encompasses environmental, social, and governance (ESG) concerns, is increasingly
positioned at the top of board agendas around the world. It is essential for corporate competitiveness and a
Key matters for investors 06-07 company’s continued ability to successfully operationalise its business model. Encompassing topics ranging from
environmental degradation and labour relations to safety incidents and scandals, sustainability affects all sectors
Integrating sustainability to achieve responsible growth 09 and challenges even the most progressive companies and the most thoughtful directors.
Sustainability risk management framework and approach 10–13 While investors have traditionally focused on the governance element (G), they increasingly demand a holistic view
from corporate boards on the interrelations between strategy, risk, and corporate sustainability that considers
Sustainable Development Goals (SDGs) 14 environmental (E) and social (S) factors.
1. No poverty 15 Among those companies that recognise the significance of sustainability for their success, Deloitte sees this topic
2. Zero hunger 16 securing more time at and in between board meetings. This is due to the fact that there is no single, standardised
approach to incorporating ESG into boardroom discussions on corporate strategy and risk.
3. Good health and well-being 17
For this reason, Deloitte has developed the Sustainability Risk Management Framework to guide the
4. Quality education 18 integration of ESG factors based on the 17 Sustainable Development Goals (SDGs). Our approach incorporates a
risk management perspective to formulate and implement a corporate strategy that builds the legacy, prosperity
5. Gender equality 19 and continuity of your organisation.
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Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
•• Addressing business issues including environmental and social issues when they have the potential to materially Financials
affect the business
1st 2nd 3rd
*Top 3 SDGs per industry (excluding SDG 17), from: MIT Sloan Management Review (2018)
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Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
Integrating sustainability to
achieve responsible growth
Sustainability Risk Management in your business
Risk management offers a systematic approach towards the management of a company’s ESG performance
and its impact on the SDGs. It allows directors and executives to embed the management of their companies’
sustainability-related priorities in their business models and value chains. Risk management can help an
organisation to determine its material ESG metrics, to design and deploy appropriate responses, and to measure
and control progress, thereby increasing its ESG performance over time.
Legacy
y 17 PARTNERSHIPS
FOR THE GOALS
1 NOPOVERTY Op
eg er
trat
16 PEACE, JUSTICE 2 ZERO
HUNGER
at
En
AND STRONG
ce
io
S
vir
ns
INSTITUTIONS
an
on
15 LIFEONLAND
rn
3 GOOD
me
HEALTH
ve
AND WELL-BEING
Go
nta
l
14 LIFEBELOW WATER 4 QUALITY
EDUCATION
Driving
13 CLIMATE
ACTION responsible 5 GENDER
EQUALITY
growth
12 RESPONSIBLE 6 CLEAN
Com
g
WATER
ortin
CONSUMPTION AND SANITATION
AND PRODUCTION
plia
Rep
nce
rity
11 SUSTAINABLE 7 AFFORDABLE
Co
CITIES AND AND
pe
CLEAN ENERGY
nt
COMMUNITIES
os
in
10 REDUCED 9INNOVATION AND 8 AND ECONOMIC
Pr
DECENT WORK
ui
INEQUALITIES INDUSTRY,
ty
GROWTH
INFRASTRUCTURE
Cyber/IT
Social
08 09
Sustainability Risk Management | Powering performance for responsible growth
Social
Corporate strategy Value chain drivers Risk exposure Response design Outcomes Performance (ESG)
•• CEO pay ratio
•• Gender pay ratio
Value drivers
1 NOPOVERTY 9 INDUSTRY,
INNOVATION AND
INFRASTRUCTURE Strategic Risk capacity Value Environmental •• Employee turnover
creation
•• Gender diversity
2 ZERO
HUNGER 10 REDUCED
INEQUALITIES
•• Temporary worker ratio
Internal Operations Mitigation Value Social
•• Non-discrimination
environment 3 GOOD HEALTH
AND WELL-
BEING
11 SUSTAINABLE
CITIES AND
COMMUNITIES
strategy protection •• Injury rate
•• Global health & safety
External
4 QUALITY
EDUCATION 12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION Change Value for
•• Child & forced labour
Reporting Governance
environment management people •• Human rights
5 GENDER
EQUALITY 13 CLIMATE
ACTION
Governance
Value Business Value for
propositions 6 CLEAN
AND
WATER
14 LIFEBELOW WATER Compliance
continuity money
•• Board diversity
SANITATION •• Board independence
•• Incentivised pay
7 AFFORDABLE
AND CLEAN
ENERGY
15 LIFEONLAND •• Collective bargaining
Profitability Cyber/IT Capacity
building •• Supplier code of conduct
8 DECENT WORK
AND ECONOMIC
GROWTH
16 PEACE, JUSTICE
AND STRONG
INSTITUTIONS •• Ethics & anti-corruption
•• Data privacy
Governance 17 PARTNERSHIPS
FOR THE GOALS
Partnership
mobilisation
•• Sustainability reporting
•• Disclosure practices
•• External assurance
Investor
10 11
Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
Overall, this six-step approach enables executives and governance leaders to identify, measure, and respond to their organisations’ most
severe risks. Controlling and reporting on relevant indicators will increase effectiveness, efficiency and trust concerning your sustainable
growth.
Corporate strategy Value chain drivers Risk exposure (threats and opportunities) Response design
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Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
4 All targets for SDG 1 to 17 have been derived from the United Nations Statistics Division (2018), from: https://
unstats.un.org/sdgs/indicators/indicators-list/
5 Asian Development Bank (2018), from: https://www.adb.org/publications/key-indicators-asia-and-pacific-2018
1 UNCTAD (2014), from: https://unctad.org/en/pages/PressRelease.aspx?OriginalVersionID=194 6 All business actions for SDG 1 to 17 have been derived from the United Nations Global Compact (2017), from:
2 Business and Sustainable Development Commission (2017), from: http://report.businesscommission.org/uploads/Better-Business-Better-World-Asia.pdf https://www.unglobalcompact.org/library/5461
3 ASEAN refers to The Association of Southeast Asian Nations, consisting of Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand 7 Wave Money (NA), from: https://www.wavemoney.com.mm/financial-inclusion/
and Vietnam. 8 Kennemer Foods (2017), from: http://www.kennemerfoods.com/news-and-updates/
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Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
SDG 2 SDG 3
End hunger, achieve food security and improved nutrition and promote sustainable Ensure healthy lives and promote well-being for all at all ages
agriculture
Targets Targets
2.1 End hunger and ensure year-round access to safe, nutritious and sufficient food 3.1 Reduce the global maternal mortality ratio to less than 70 per 100,000 live births
2.2 End malnutrition and address the nutritional needs of adolescent girls, pregnant and 3.2 End preventable deaths of newborns and children under 5 years of age
lactating women and older persons 3.3 End the epidemics of AIDS, tuberculosis, malaria and neglected tropical diseases and
2.3 Double the agricultural productivity and incomes of small-scale food producers combat hepatitis, water-borne diseases and other communicable diseases
2.4 Ensure sustainable food production systems and implement resilient agricultural 3.4 Reduce by one third premature mortality from non-communicable diseases through
practices prevention and treatment and promote mental health and well-being
2.5 Maintain the genetic diversity of seeds, plants and animals though seed and plant 3.5 Strengthen the prevention and treatment of substance abuse
banks and share benefits of genetic resources and traditional knowledge 3.6 Halve the number of global deaths and injuries from road traffic accidents
3.7 Ensure universal access to sexual and reproductive healthcare services
Key insights 3.8 Achieve universal health coverage, including access to safe, effective, quality and
•• The prevalence of stunting among children under five years of age in the ASEAN region affordable essential medicines and vaccines
is high: roughly 4 in 10 in Lao PDR, 1 in 3 in Cambodia, Myanmar, Indonesia, and the 3.9 Reduce the number of deaths and illnesses from hazardous chemicals and air, water
Philippines, 1 in 4 in Vietnam, and 1 in 5 in Malaysia and Brunei.9 and soil pollution and contamination
•• Between 10% and 15% of the population in Cambodia, Lao PDR, Myanmar, the
Philippines, and Vietnam still suffer from undernourishment.9 Key insights
•• The incidence rates of tuberculosis in Cambodia, Myanmar, Indonesia, and the
Business actions Philippines are among the highest in the world (between 345 and 554 per 100,000
1. Support farmers to increase yields and incomes from sustainable, small-scale population).12
agriculture •• Roughly 1 in 4 premature deaths in Indonesia, Lao PDR, Myanmar, and the Philippines,
2. Alter food manufacturing, distribution and retail to contribute to ending malnutrition and 1 in 5 premature deaths in Cambodia and Malaysia can be attributed to
and hunger in all communities surrounding company operations cardiovascular disease, cancer, diabetes, or chronic respiratory disease.12
3. Work towards eliminating food waste and loss
Business actions
Example 1. Ensure the best possible health outcomes for employees and surrounding
•• A Japanese insurer is providing agriculture-related products and developing new communities across company and supply chain operations
products in this field in Thailand, the Philippines, and Myanmar to reduce the burden of 2. Research, develop, and deploy products, services, and business models for improved
losses for agricultural producers while driving market development.10 health outcomes
•• A Singaporean rice producer operating in several countries in the ASEAN region 3. Lead on multi-stakeholder initiatives that encourage healthy behaviours and improve
contributes to increased farmer income by buying directly from farmers, thereby access to healthcare
circumventing middlemen, by providing inputs, and by facilitating the consolidation of
land, thereby increasing efficiency.11 Example
•• A Swiss pharmaceutical firm has developed a business model aimed at increasing access
of rural communities in India, Kenya, and Vietnam to health information, diagnostics,
and products. By training and cooperating with doctors in community health centres
and government entities, the firm is addressing priority healthcare-related needs in each
country and simultaneously increasing its market penetration.13
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Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
SDG 4 SDG 5
Ensure inclusive and equitable quality education and promote lifelong learning Achieve gender equality and empower all women and girls
opportunities for all
Targets Targets
4.1 Ensure that all girls and boys complete free, equitable and quality primary and 5.1 End all forms of discrimination against all women and girls everywhere
secondary education 5.2 Eliminate all forms of violence against all women and girls in the public and private
4.2 Ensure that all girls and boys have access to quality early childhood development, care spheres, including trafficking and sexual and other types of exploitation
and pre-primary education 5.3 Eliminate all harmful practices, such as child, early and forced marriage and female
4.3 Ensure equal access to affordable and quality technical, vocational and tertiary genital mutilation
education, including university 5.4 Recognise and value unpaid care and domestic work
4.4 Substantially increase the number of youth and adults who have relevant skills, 5.5 Ensure women’s full and effective participation and equal opportunities for leadership
including technical and vocational skills, for employment, decent jobs and 5.6 Ensure universal access to sexual and reproductive health and reproductive rights
entrepreneurship
4.5 Eliminate gender disparities in education and ensure equal access to all levels of Key insights
education and vocational training for the vulnerable •• The proportion of women in managerial positions is less than 1 in 5 in Malaysia and
4.6 Ensure that all youth and a substantial proportion of adults achieve literacy and Indonesia and less than 1 in 3 in Cambodia, Lao PDR, Myanmar, and Thailand; at the
numeracy same time it is one of the highest in the world in the Philippines with every second
4.7 Ensure that all learners acquire the knowledge and skills needed to promote managerial position held by a woman.17
sustainable development •• Overall GDP losses due to gender gaps in labor participation are between 15% and 20%
of GDP for the Philippines, Indonesia, and Malaysia.18
Key insights
•• Out of the 17 SDGs, SDG 4 has the highest chance of achievement by 2030 on part of Business actions
countries in the region.14 However, a focus on early childhood interventions, particularly 1. Implement policies and practices that are free from and prevent gender-based
targeted at disability-inclusion, will be required.15 discrimination across the workplace, marketplace, and community
2. Support women’s employment and strive for gender balance at all levels across the
Business actions business and supply chain
1. Ensure that all employees across the business and supply chain have access to 3. Develop products and services and implement marketing practices that empower
vocational training and life-long learning opportunities women
2. Ensure that all employees across the business and supply chain earn a wage that 4. Promote gender equality through investment, community initiatives and advocacy
allows them to support the education of dependents and that there is zero child labour
3. Implement programmes to support higher education and access to free, equitable, Example
and inclusive primary and secondary education, focusing particularly on disadvantaged •• A British-Dutch consumer goods company created a network of female micro-
groups entrepreneurs in India that it trains as sales agents in their communities. The firm
4. Research, develop and deploy products and services that improve educational access thereby increased its market penetration in more than 160,000 villages that are difficult
and learning outcomes to reach through traditional marketing channels while simultaneously equipping rural
women with entrepreneurial skills and income opportunities.19
Example •• A major telecommunications company in Singapore has been ranked first in Asia
•• A Swiss power and automation group provides talented engineering students in Pacific and fifth among corporations globally in terms of gender equality because of its
Indonesia, Malaysia, Vietnam, and elsewhere with college scholarships, a company commitments to female board representation and fair compensation policies.20
mentor, and an invitation to visit the group’s Corporate Research Centre. The company
increases the skill levels of local populations while bolstering their recruitment strategy.16
14 UNESCAP (2017), from: https://www.unescap.org/sites/default/files/Asia-Pacific-SDG-Progress-Report-2017. 17 Asian Development Bank (2018), from: https://www.adb.org/publications/key-indicators-asia-and-pacific-2018
pdf 18 Tan (2016), from: https://www.weforum.org/agenda/2016/05/women-key-to-east-asia-economic-success/
15 UNESCO (2018), from: https://bangkok.unesco.org/content/education-and-disability-analysis-data-asia-pacific- 19 Mahajan (2016), from: https://hbr.org/2016/12/how-unilever-reaches-rural-consumers-in-emerging-markets
countries 20 Starhub (2018), from: http://www.starhub.com/about-us/newsroom/2018/october/starhub-ranked-top-in-
16 ABB (NA), from: https://new.abb.com/sustainability/society/foundation asia-pacific-for-gender-equality.html
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Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
SDG 6 SDG 7
Ensure availability and sustainable management of water and sanitation for all Ensure access to affordable, reliable, sustainable and modern energy for all
Targets Targets
6.1 Achieve universal and equitable access to safe and affordable drinking water for all 7.1 Ensure universal access to affordable, reliable and modern energy services
6.2 Achieve access to adequate and equitable sanitation and hygiene for all and end open 7.2 Increase substantially the share of renewable energy in the global energy mix
defecation 7.3 Double the global rate of improvement in energy efficiency
6.3 Improve water quality by reducing pollution, eliminating dumping and minimising
release of hazardous chemicals and materials Key insights
6.4 Substantially increase water-use efficiency across and ensure sustainable withdrawals •• In Cambodia, half of the population lives without access to electricity, whereas this is the
and supply of freshwater to address water scarcity case for roughly four in ten people in Myanmar.23
6.5 Implement integrated water resources management at all levels, including through •• Energy demand in Southeast Asia is expected to more than double by 2040 but more
transboundary cooperation as appropriate than 65 million people currently have no access to electricity and 250 million people are
6.6 Protect and restore water-related ecosystems, including mountains, forests, wetlands, dependent on traditional biomass for cooking.24
rivers, aquifers and lakes
Business actions
Key insights 1. Significantly increase energy efficiency, source remaining energy needs from
•• Per capita water availability in Asia Pacific is the lowest in the world and more than 80 per renewable sources, and promote the same action across the supply chain through
cent of wastewater in the developing countries of the region is not treated.21 supplier selection and support
2. Research, develop, and deploy affordable sustainable energy and energy efficiency
Business actions products and services
1. Develop and implement holistic water strategies that are socially equitable, 3. Develop and implement business models to deliver sustainable energy and energy
environmentally sustainable, and economically beneficial in watersheds around efficiency technologies to new markets and communities
company and supply chain operations
2. Protect and/or restore water-based ecosystems around company operations and Example
supply chain •• A European aerospace corporation created a Centre of Excellence in Malaysia together
3. Ensure access to water and sanitation by addressing impacts of company and supply with several local partners to develop processes for sustainable fuel usage in planes.
chain operations on local water supplies and supporting stakeholders to deliver clean The initiative aims to reduce greenhouse gas emissions while spearheading industry
water and sanitation innovations.25
•• An Indian conglomerate leveraged its core competencies to create affordable energy
Example access to rural communities in the form of micro-grids, ownership of which was ensured
•• A Dutch brewing company made significant commitments to reduce the use of water, through the development of village institutions. While the community benefited from a
which it relies on throughout its entire value chain, for example, by hosting stakeholder reduction of kerosene consumption, improved social interactions and longer periods
consultation workshops in Indonesia in collaboration with an UN agency, which resulted in which children could study, the company built its brand and generated new revenue
in the establishment of a cross-sector alliance. In addition, the company partnered with streams.26
an NGO to replant trees and to restore land that is critical to the water supply and flood
resilience of 30 million people.22
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Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
SDG 8 SDG 9
Promote sustained, inclusive and sustainable economic growth, full and productive Build resilient infrastructure, promote inclusive and sustainable industrialisation and
employment and decent work for all foster innovation
Targets Targets
8.1 Sustain per capita economic growth 9.1 Develop quality, reliable, sustainable and resilient infrastructure to support economic
8.2 Achieve higher levels of economic productivity development and human well-being
8.3 Promote development-oriented policies that support productive activities, decent 9.2 Promote inclusive and sustainable industrialisation and, by 2030, significantly raise
job creation, entrepreneurship, creativity and innovation industry’s share of employment and gross domestic product, in line with national
8.4 Improve progressively global resource efficiency in consumption and production and circumstances, and double its share in least developed countries
endeavour to decouple economic growth from environmental degradation 9.3 Increase the access of small-scale industrial and other enterprises to financial services,
8.5 Achieve full and productive employment and decent work for all women and men including affordable credit, and their integration into value chains and markets
and equal pay for work of equal value 9.4 Upgrade infrastructure and retrofit industries to make them sustainable, with
8.6 Substantially reduce youth unemployment increased resource-use efficiency and greater adoption of clean and environmentally
8.7 Eradicate forced labour, modern slavery, child labour and human trafficking sound technologies and industrial processes
8.8 Protect labour rights and promote safe and secure working environments for all 9.5 Enhance scientific research and upgrade the technological capabilities of industrial
workers sectors
8.9 Devise and implement policies to promote sustainable tourism that creates jobs and
promotes local culture and products Key insights
8.10 Strengthen the capacity of domestic financial institutions to encourage and expand •• The three countries in the region with the highest manufacturing value-added as a
access to banking, insurance and financial services for all percentage of GDP are Thailand (27.0%), Myanmar (23.7%), and Malaysia (22.3%).29
•• The three countries in the region with the lowest manufacturing value-added as a
Key insights percentage of GDP are Lao PDR (7.5%), Brunei (12.7%), and Vietnam (15.3%).29
•• The youth unemployment rate stands at around 28.5% in Brunei, 15.8% in Indonesia,
and 10.8% in Malaysia. The other countries in the region have less than 7.5% youth Business actions
unemployment.27 1. Research, develop, and deploy products, services and business models to deliver
sustainable and resilient infrastructure
Business actions 2. Support inclusive and sustainable upgrading of developing country industries in global
1. Support decent working conditions for all employees across the business and supply value chains
chain, with partnerships to build suppliers’ capacity to do the same 3. Create innovation systems for sustainable development by providing access to finance,
2. Educate and train the labour force, focusing on vulnerable and economically fostering entrepreneurship, and pooling financial and research resources in a global
disadvantaged groups knowledge base
3. Create decent formal-sector jobs in labour-intensive sectors, especially in least- 4. Upgrade and retrofit infrastructure and industry assets across company and supply
developed countries chain operations to make them sustainable and resilient
4. Drive economic growth and productivity by investing in R&D, upgrading skills,
and supporting growing businesses, in a way that is compatible with sustainable Example
development •• A Dutch paint manufacturer developed exterior paint for Singaporean and Malaysian
markets, among others, that reduces heat absorption, drastically reducing energy usage
Example and costs for citizens while achieving a strong market position through an important
•• A French airport operator offers contract employment and full social welfare to 1,300 technological innovation.30
craftsmen in Cambodia and reinvests profit into developing this business. The operator •• A Swedish telecommunications company partnered with a Malaysian university to
gains access to artisan craftsmanship while locals benefit from social welfare packages establish an Innovation Centre focusing on 5G technology. The centre enables the two
and training programmes.28 organisations to showcase latest technological advancements, pursue cutting-edge
research, and develop and deliver learning modules for industry representatives and
students.31
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Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
SDG 10 SDG 11
Reduce inequality within and among countries Make cities and human settlements inclusive, safe, resilient and sustainable
Targets Targets
10.1 Progressively achieve and sustain income growth of the bottom 40 per cent of the 11.1 Ensure access for all to adequate, safe and affordable housing and basic services and
population at a rate higher than the national average upgrade slums
10.2 Empower and promote the social, economic and political inclusion of all, irrespective 11.2 Provide access to safe, affordable, accessible and sustainable transport systems for
of age, sex, disability, race, ethnicity, origin, religion or economic or other status all, improving road safety, notably by expanding public transport
10.3 Ensure equal opportunity and reduce inequalities of outcome 11.3 Enhance inclusive and sustainable urbanisation and capacity for participatory,
10.4 Adopt policies, especially fiscal, wage and social protection policies, and progressively integrated and sustainable human settlement planning and management in all
achieve greater equality countries
10.5 Improve the regulation and monitoring of global financial markets and institutions 11.4 Strengthen efforts to protect and safeguard the world’s cultural and natural heritage
and strengthen the implementation of such regulations 11.5 Significantly reduce the number of deaths and the number of people affected and
10.6 Ensure enhanced representation and voice for developing countries in decision- substantially decrease the direct economic losses relative to global gross domestic
making in global international economic and financial institutions product caused by disasters
10.7 Facilitate orderly, safe, regular and responsible migration and mobility of people 11.6 Reduce the adverse per capita environmental impact of cities, including by paying
special attention to air quality and municipal and other waste management
Key insights 11.7 Provide universal access to safe, inclusive and accessible, green and public spaces
•• Southeast Asia is the only sub-region in Asia Pacific in which income inequality is
widening.32 Key insights
•• The ratio of the top 10% and the bottom 40% of the population in terms of income share •• The proportion of the urban population living in slums, informal settlements, or
(Palma ratio), is 2.6 in Malaysia, 1.9 in the Philippines, and 1.8 in Indonesia. For Myanmar, inadequate housing is 55.1% in Cambodia, 41.0% in Myanmar, and 38.3% in the
Thailand, Lao PDR, and Vietnam the ratio is between 1.7 and 1.4.33 Philippines. Living in these conditions are almost 1 in 3 urban residents in Lao PDR, 1 in 4
urban residents in Thailand and Vietnam, and 1 in 5 urban residents in Indonesia.35
Business actions •• In 2018, the ASEAN Smart Cities Network (ASCN) was established as a collaborative
1. Assess the distribution of economic value across stakeholder groups and implement platform to synergise efforts of governments and the private sector to build smart and
policies and practices to make it more equal resilient cities in the region.36
2. Support the establishment and expansion of social protection measures at the
national level Business actions
3. Implement policies and practices to support equality of opportunity, treatment and 1. Research, develop, and deploy products and services which improve access to resilient
outcome for all across company and supply chain operations buildings, transport, green spaces, and utilities
4. Design and implement products, services, and business models that explicitly target 2. Protect and invest in cultural and natural heritage
the needs of disadvantaged and marginalised populations 3. Support access to essential services across the workplace, marketplace, and
community
Example
•• An American automobile manufacturer developed employee resource groups Example
throughout the world to improve professional development support and employee •• An American bank offered climate finance research regarding sustainable infrastructure
engagement in local communities, At the same time, these employee resource groups financing to the C40, a group of large cities (including six in Southeast Asia) that are
improve the company’s understanding of diverse consumer markets and contribute to devoted to combating climate change, providing cities with important perspectives and
tailored talent acquisition strategies.34 fostering relationships with city administrators and other relevant stakeholders.37
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Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
SDG 12 SDG 13
Ensure sustainable consumption and production patterns Take urgent action to combat climate change and its impacts*
Targets Targets
12.1 Implement the 10‑Year Framework of Programmes on Sustainable Consumption and 13.1 Strengthen resilience and adaptive capacity to climate-related hazards and natural
Production Patterns disasters in all countries
12.2 Achieve the sustainable management and efficient use of natural resources 13.2 Integrate climate change measures into national policies, strategies and planning
12.3 Halve per capita global food waste at the retail and consumer levels and reduce food 13.3 Improve education, awareness-raising and human and institutional capacity on
losses along production and supply chains, including post-harvest losses climate change mitigation, adaptation, impact reduction and early warning
12.4 Achieve the environmentally sound management of chemicals and all wastes *Acknowledging that the United Nations Framework Convention on Climate Change is the primary international,
throughout their life cycle and significantly reduce their release to air, water and soil intergovernmental forum for negotiating the global response to climate change.
12.5 Substantially reduce waste generation through prevention, reduction, recycling and
reuse Key insights
12.6 Encourage companies, especially large and transnational companies, to adopt •• Southeast Asia is one of the regions in the world that are most vulnerable to climate
sustainable practices and to integrate sustainability information into their reporting change: Myanmar, the Philippines, and Vietnam are among the 10 countries worldwide
cycle most affected by climate change-related risks, and Thailand and Cambodia are in the
12.7 Promote public procurement practices that are sustainable, in accordance with global top 20.41
national policies and priorities •• The International Renewable Energy Agency (IRENA) signed an agreement with ASEAN
12.8 Ensure that people everywhere have the relevant information and awareness for in late 2018 to support governments in the region in the transition towards sustainable
sustainable development and lifestyles in harmony with nature energy and the reduction of carbon emissions. IRENA estimates that ASEAN’s target of
23% primary energy being derived from renewable energy sources by 2025 will require
Key insights investments of US$27 billion annually.42
•• Material footprints measured in million metric tons have drastically increased between
2000 and 2015 throughout Southeast Asia, e.g. in Myanmar (29.9 to 116.8), Indonesia Business actions
(590.2 to 1,606.2), Thailand (403.1 to 750.6), and Vietnam (272.5 to 832.3).38 1. Ensure climate resilience of company and supply chain operations, and the
communities surrounding them
Business actions 2. Substantially reduce emissions associated with company and supply chain operations,
1. Design and adopt a responsible and circular business model in alignment with climate science
2. Significantly narrow or close material and energy loops across company and supply 3. Shift to a portfolio of goods and services that have, and promote, negligible emissions
chain operations from use
3. Shift to a portfolio of goods and services that require and promote negligible use of 4. Promote climate conscious behavior and build capacity for climate action
resources and produce negligible waste
4. Develop, implement, and share solutions for tracing and reporting on sustainability Example
of production and consumption across end-to-end operations and impact on •• A Swiss insurance company implemented solutions to help make communities in
surrounding communities Indonesia and elsewhere more resilient towards flooding, increasing the safety of at-
risk communities while improving the firm’s methodology for determining insurance
Example premiums.43
•• A taxi-sharing company in Vietnam adopted a sustainable business model through •• A Singapore-based real estate operating company has been ranked among the top 100
promoting vehicle sharing and decreasing waste and fuel costs while accessing a market most sustainable companies in the world for 10 consecutive years as well as among
of interested lower income individuals.39 the globally leading corporations concerning climate change because of its strategic
•• Some of the largest consumer product companies in the world have joined forces to pilot management of environmental, but also social and governance (ESG) issues across the
a new business model, using reusable packaging such as glass and steel containers. This organisation.44
model holds the potential to address global pollution and to cater to the demands of
eco-conscious consumers.40
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Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
SDG 14 SDG 15
Conserve and sustainably use the oceans, seas and marine resources for sustainable Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage
development forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
Targets Targets*
14.1 Prevent and significantly reduce marine pollution of all kinds, in particular from land- 15.1 Ensure the conservation, restoration and sustainable use of terrestrial and inland
based activities freshwater ecosystems and their services
14.2 Sustainably manage and protect marine and coastal ecosystems and take action for 15.2 Promote the implementation of sustainable management of all types of forests, halt
their restoration deforestation, restore degraded forests and substantially increase afforestation and
14.3 Minimise and address the impacts of ocean acidification, including through enhanced reforestation globally
scientific cooperation at all levels 15.3 Combat desertification, restore degraded land and soil
14.4 Effectively regulate harvesting and end overfishing, illegal, unreported and 15.4 Ensure the conservation of mountain ecosystems
unregulated fishing and destructive fishing practices and implement science-based 15.5 Take urgent and significant action to reduce the degradation of natural habitats, halt
management plans the loss of biodiversity and protect and prevent the extinction of threatened species
14.5 Conserve at least 10 per cent of coastal and marine areas, consistent with national 15.6 Promote fair and equitable sharing of the benefits arising from the utilisation of
and international law and based on the best available scientific information genetic resources and promote appropriate access to such resources
14.6 Prohibit certain forms of fisheries subsidies which contribute to overcapacity and 15.7 Take urgent action to end poaching and trafficking of protected species of flora and
overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fauna and address both demand and supply of illegal wildlife products
fishing and refrain from introducing new such subsidies *Most relevant selected.
14.7 Increase the economic benefits to small island developing states and least developed
countries from the sustainable use of marine resources Key insights
•• Less than half of important sites for both terrestrial and freshwater biodiversity are
Key insights covered by protected areas in the majority of Southeast Asian countries, with the
•• The average proportion of marine key biodiversity areas covered by protected areas is exception of Brunei, Malaysia, and Thailand.48
less than one-third in Malaysia and Indonesia, less than one-fourth in Cambodia, less
than one-fifth in Myanmar and only 1 in 33 in Singapore.45 Business actions
1. Implement policies and practices to protect natural ecosystems that are affected by
Business actions business and supply chain activities
1. Implement policies and practices to protect ocean ecosystems that are affected by 2. Research, develop, and deploy products, services, and business models to help
business and supply chain activities decouple economic activity from the degradation of natural ecosystems
2. Research, develop, and deploy products, services, and business models which negate 3. Galvanise finance to create awareness, protect, and further develop natural
impacts on ocean ecosystems and contribute to their restoration ecosystems
3. Galvanise finance for the protection and further development of ocean ecosystems 4. Design and implement solutions to accurately value and respect natural capital, and
and water system flows drive wider adoption of these solutions
4. Design and implement solutions to accurately value and respect natural capital, and
drive wider adoption of these solutions Example
•• One of the largest pulp and paper companies in the world, based in Indonesia, is
Example addressing deforestation through multiple activities. Among others, the company places
•• A German sports apparel company partnered with an environmental NGO to source emphasis on supply chain certification and monitoring using satellite technology. In
ocean plastic to be used in the manufacturing of its products, which resulted in the addition, it organises community-based training programmes regarding sustainable
launch of several profitable product lines and the commitment to use only recycled agroforestry practices and collects baseline data to improve its reporting of progress.49
plastic for its products by 2024.46
•• An American carpet manufacturer encourages the collection and safe disposal of fishing
nets in the Philippines through purchasing used fishing nets from locals and selling them
to the firm’s yarn supplier and partner.47
45 Asian Development Bank (2018), from: https://www.adb.org/publications/key-indicators-aia-and-pacific-2018 48 Asian Development Bank (2018), from:: https://www.adb.org/publications/key-indicators-asia-and-pacific-2018
46 Rosane (2018), from: https://www.ecowatch.com/adidas-recycled-plastics-2587520180.html 49 Edienet (2019), from: https://www.edie.net/library/In-Action--How-Asia-Pulp---Paper-is-achieving-SDG-15-Life-
47 Interface (NA), from: https://www.interface.com/US/en-US/about/modular-carpet-tile/Net-Effect On-Land/6869
28 29
Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
SDG 16 SDG 17
Promote peaceful and inclusive societies for sustainable development, provide access Strengthen the means of implementation and revitalise the Global Partnership for
to justice for all and build effective, accountable and inclusive institutions at all levels Sustainable Development
Targets Targets*
16.1 Significantly reduce all forms of violence and related death rates everywhere 17.1 Strengthen domestic resource mobilisation
16.2 End abuse, exploitation, trafficking and all forms of violence against and torture of 17.3 Mobilise additional financial resources for developing countries
children 17.5 Adopt and implement investment promotion regimes for least developed countries
16.3 Promote the rule of law at the national and international levels and ensure equal 17.6 Enhance North-South, South-South and triangular regional and international
access to justice for all cooperation on and access to science, technology and innovation
16.4 Significantly reduce illicit financial and arms flows, strengthen the recovery and 17.7 Promote the development, transfer, dissemination and diffusion of environmentally
return of stolen assets and combat all forms of organised crime sound technologies to developing countries on favourable terms
16.5 Substantially reduce corruption and bribery in all their forms 17.9 Enhance international support for implementing effective and targeted capacity-
16.6 Develop effective, accountable and transparent institutions at all levels building in developing countries
16.7 Ensure responsive, inclusive, participatory and representative decision-making at all 17.16 Enhance the Global Partnership for Sustainable Development, complemented
levels by multi-stakeholder partnerships that mobilise and share knowledge, expertise,
16.8 Broaden and strengthen the participation of developing countries in the institutions technology and financial resources
of global governance 17.17 Encourage and promote effective public, public-private and civil society partnerships
16.9 Provide legal identity for all, including birth registration 17.18 Enhance capacity-building support to developing countries, including for least
16.10 Ensure public access to information and protect fundamental freedoms developed countries and small island developing States, to increase significantly the
availability of high-quality, timely and reliable data
Key insights *Most relevant selected.
•• Around 1 in 3 firms in Indonesia, Malaysia, and Myanmar experienced at least one bribe
payment request in the last (available) year, while 2 in 3 firms experienced the same in Key insights
Cambodia.50 •• The ASEAN Community Vision 2025 offers an excellent reference for member countries
•• Countries in Southeast Asia rank low in terms of perceived public sector corruption to achieve the SDGs through enhanced integration and collaboration, particularly with
globally. For example: Cambodia ranks 161st, Lao PDR and Myanmar rank 132nd, Vietnam regards to finance-, trade-, and technology-related matters.53
ranks 117th, the Philippines and Thailand rank 99th, and Indonesia ranks 89th.51
Business actions
Business actions 1. Lead on partnerships to improve domestic resource mobilisation through responsible
1. Identify and take robust action against corruption and violence in company and supply tax practices
chain operations 2. Galvanise private sector finance to support sustainable development initiatives in
2. Work with government to strengthen institutions and increase respect and support for developing countries
the rule of law 3. Lead on partnerships to develop and share new and existing technology, knowledge,
3. Work with government and/or international institutions in areas of conflict and and business models
humanitarian crises to contribute to peace and institution building 4. Build regulatory, organisational, and staff capacity in developing countries
5. Lead on partnerships that address systemic challenges for achieving the SDGs
Example
•• A Norwegian mobile operator collaborated with a fund of the United Nations to establish Example
a new birth and death registration system in Myanmar, which allows health officers •• A multi-stakeholder initiative based in Singapore collaborates with and brings
to register data using mobile technology. In addition, the company provides financial together over 500 actors, including farmers, businesses, governments and civil society
support and free data to the users of this system, and thereby contributes to the organisations to transform the regional agriculture-sector through market-based
government's ability to achieve universal birth registration.52 approaches.54
50 Asian Development Bank (2018), from: https://www.adb.org/publications/key-indicators-asia-and-pacific-2018 53 UNESCAP (2017), from: https://asean.org/storage/2017/11/FINAL_Complementarities-Report-no-graphic-on-
51 Transparency International (NA), from: https://www.transparency.org/cpi2018 cover.pdf
52 UNICEF (2018), from: https://www.unicef.org/myanmar/media_27871.html 54 Grow Asia (NA), from: https://www.growasia.org/
30 31
Sustainability Risk Management | Powering performance for responsible growth Sustainability Risk Management | Powering performance for responsible growth
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The Prince’s Accounting for Sustainability Project organisation can take on”
A4S
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opportunities, by ALM Intelligence
•• Deloitte has a representative on the Global Forum.
•• Number 1 professional service provider to the life sciences & healthcare industry, based on our ability
Formerly the Carbon Disclosure Project
to provide one of the widest ranges of capability in the industry and the relationship models to support large
CDP •• Deloitte is a past global and U.S. sponsor of CDP Water Disclosure, and DTTL has programme initiatives, by Kennedy
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The Sustainability Risk Management brochure is part of a set of brochures that Deloitte has developed to offer
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Help to drive and leveraging
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UNLEASH
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32 33
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