Leadership and the Role of Public Policy
CHAPTER 4
The need for support
The energy transition within APAC will be a lot smoother and more likely to be successful if there is synergy between corporations and governments.
For their part, governments have a critical role to play in enabling the corporate journey towards clean energy. Most corporations get access to renewable or clean energy through the government or national exchanges.
In Southeast Asia, 41% of the respondents said that they leaned on government agencies in their respective countries to ensure that they had access to clean energy.
In Singapore alone, 57% depended on government agencies for access to clean energy supplies, which is understandable given the highly regulated nature of the energy market in Singapore.
In fact, the majority of companies see government support as critical.
Clean energy advocates have suggested that in order to increase the adoption of renewables, governments should also consider higher tariffs on brown energy, with 42% of respondents agreeing with this approach. Yet, a majority of respondents (59%) in SEA believe that instead of pushing for green, governments in this region will increase their support for fossil fuel-based energy in the next two to three years.
On the other hand, 47% of corporations in Oceania and East Asia believe that government support for fossil fuel-based energy will remain unstable in the next two to three years.
In many less developed countries in the region, governments have other key focus areas, such as infrastructure, healthcare and education, which are of higher priority than sustainability.
Majority of Corporates in APAC see Government Support as Critical
of corporates in APAC believe government tariffs on brown energy will support their organisation's transition to renewable energy
Yet, Corporates see Governments as Unsupportive
of corporates in SEA believe government support for fossil fuel-based energy will increase in the next 2-3 years
of corporates in Oceania and East Asia believe government support for fossil fuel-based energy will remain unstable in the next 2-3 years
Leading the Charge
While waiting for governments to take a more assertive role, 53% of the respondents felt that large corporations could take the lead in driving change and fixing environmental problems, becoming agents of change themselves.
The power of coalitions
Companies that are leading the charge towards renewable energy want to come together to put pressure on fellow competitors and governments to accelerate the change, forming coalitions to enable the renewable energy transition.
In fact, 68% of respondents from these companies want greater cooperation among countries and companies alike. Two-thirds (68%) of these respondents strongly agreed that companies should work together by forming coalitions to achieve their sustainability goals. The same number of respondents also indicated support for countries in APAC to work together to provide renewable energy.
Of companies that are leading the charge towards renewable energy...
strongly agree that companies should work together (form coalitions) to achieve their sustainability goals
strongly agree that countries in APAC should work together to provide renewable energy
Coalitions can be avenues for effective change, speeding up decision-making and setting industry standards with regulatory bodies. Among corporations, the lines are even clearer on where they stand in relation to the road ahead. A clear majority (87%) of respondents in the Philippines are in favour of forming coalitions to attain sustainable goals, followed by Indonesian respondents (68%), with the lowest support coming from South Korea at just 38% of respondents. This ensures the pooling of resources and that no one gets left behind in the journey towards a more sustainable future when it comes to energy demand and utility.
“The role of the business in society is also changing. Business is not just here to make profit; we have a responsibility towards environment and communities we play in.”
- Sreepadaraj Karanam, VP, Sustainability & CSR, Bridgestone Asia Pacific
As APAC is growing its manufacturing hub, large companies are increasingly putting pressure on their suppliers to go green. Among the respondents who strongly agreed that companies have a leading role to play in driving the renewable energy transition, 56 percent said that sourcing from a sustainably operating company is a major factor in their purchasing decisions.
Respondents from the Philippines and Thailand have shown greatest support for sourcing from other sustainable companies (77 percent and 75 percent respectively), while just 15 percent of South Korea respondents agreed – the lowest in the region.
Nevertheless, more and more corporations are pushing their sustainable targets onto their suppliers to ensure sustainability along the value chain. Leading suppliers have recognised this and have already embarked on their own transition, cognisant of the business advantage it will provide them.
What's the key takeaway?
Governments within APAC, of course, have a huge part to play in helping to drive the energy transition. Through policies, regulatory frameworks and support models that favour renewables over fossil fuels, governments can help to bring about the energy transition in the region at the pace needed. But many leading corporations are not waiting. Already well aware of the multiple benefits to be derived from transitioning to renewables, they themselves are helping to drive forward the transition and pave the way for others. But speed is of the essence, and delay will see the real-world impacts of the climate crisis exacerbated. Many governments are then underdelivering in their role as enablers of the corporate transition, and that will delay the many from becoming the majority.