As Asia-Pacific’s economic landscape continues to rapidly evolve, sustainability has emerged as a cornerstone of corporate strategy. Being a prominent player in the financial sector, CGS International (CGSI) has made progressive strides in embedding sustainability into its operations.
With a forward-looking approach, CGSI has set ambitious goals for the coming years through its Vision 2025 and its comprehensive five-year execution roadmap, which explores CGSI’s eight sustainability focus areas, regional challenges in ESG (Environmental, Social, and Governance) practices, and the firm’s strategies to lead by example in the industry.
In an exclusive interview with The Exchange Asia, CGS International Group Head of Sustainability, Kevin Lee explained that CGSI’s Vision 2025 integrates sustainability as a strategic pillar, aiming to establish itself as a world-class investment bank in Asia.
The company’s sustainability efforts are guided by eight focus areas, namely Climate Change and Decarbonisation, Biodiversity and Nature-Based Investments, Research for Low-Carbon and Socio-Economic Growth Sustainable Finance, Inclusive Growth, Sustainability Disclosures, Cybersecurity and Digitalisation and Social Responsibility.
According to Lee, these focus areas guide CGSI’s sustainability strategy, reflecting its commitment to responsible business practices and long-term value creation.
Addressing ESG Transparency Challenges in ASEAN
The ASEAN region presents a diverse landscape for ESG practices, with varying levels of transparency and sustainability adoption.
“Currently, Singapore is leading the region in terms of stringent ESG disclosures, including mandatory climate reporting for listed companies by 2025. Meanwhile, Malaysia is in the process of adopting similar reporting standards, while other ASEAN countries are at different stages of ESG integration,” Lee said.
He also mentioned that CGSI is addressing several challenges in the disparity in ESG practices across the region through various initiatives.
One of those initiatives is improving ESG education and awareness by developing an ESG education pack for employees, providing foundational knowledge on sustainability and its relevance to the company’s operations.
Additionally, the firm is actively measuring and reporting ESG metrics, such as greenhouse gas (GHG) emissions and human capital performance to help employees understand the impact of their activities on sustainability.
“We also adopt a methodical approach to address regional ESG challenges. By respecting local cultures and business environments, the company tailors its sustainability efforts to fit the specific needs of each ASEAN country.
“Through these measures, we aim to elevate ESG standards across our regional offices and support the broader adoption of sustainable practices,” Lee opined.
Setting an Industry Example Beyond Reporting
Despite this, CGSI is not just focused on producing sustainability reports – it strives to lead by example through innovative initiatives and partnerships.
For example, CGSI partnered with CSOP Asset Management to launch the CSOP CGS-CIMB FTSE Asia Pacific Low Carbon Index ETF on the Singapore Exchange (SGX), which marks the world’s first low-carbon ETF with a focus on Asia-Pacific markets when it was launched in late-2022.
The firm also established the ASEAN Institute of Carbon Neutrality (AICN), which aims to educate the business community on regional sustainability issues and influence capital markets to invest in sustainable development. Lee believes that collaborations with institutions like the National University of Singapore (NUS) enhance the institute’s impact through joint research and thought leadership.
Meanwhile, CGSI’s flagship financial literacy programme, the ASEAN Investment Challenge (AIC) engages thousands of students across ASEAN in investment challenges, incorporating ESG criteria into its evaluation, promoting sustainable investing among the next generation of investors.
The second AIC is now open for registration from 1 August 2024 to 30 September 2024 and students from participating Institutes of Higher Learning in Malaysia, Indonesia, Singapore and Thailand can register for AIC 2024 online at https://aseaninvestmentchallenge.com/.
“We recognise the pivotal role that the finance sector plays in enabling sustainability across various industries. This is why our research team works tirelessly to provide valuable insights into ESG trends to further help investors make better sustainable choices.
“Apart from that, we also advocate Sharia-compliant investing, which also includes increasing awareness and providing tools for Shariah-aligned investments in Muslim-majority countries,” Lee said.
However, driving the ESG agenda across diverse operations presents several challenges. Transitioning from the energy sector to finance required contextualising sustainability practices, which involves aligning ESG strategies with the finance industry’s unique characteristics.
According to Lee, the rise of greenwashing allegations has impacted perceptions of ESG investing. Because of this, Lee highlighted AICN’s research projects, in collaboration with NUS that aim to provide valuable insights into decarbonisation and sustainability. For this, regular webinars will facilitate industry dialogue and knowledge sharing.
In short, CGS International is already making significant strides in integrating sustainability into its operations and setting an industry example. Through its comprehensive focus areas, regional initiatives, and innovative strategies, Lee believes that CGSI will be able to effectively drive positive change in the financial sector and contribute to a more sustainable future.
