Will be announcing first investment this quarter
Fund will invest USD250-800k in pre-seed, seed & pre-series A startups
The Radical Fund announced that it has secured the first close of its target US$40 million (RM182 million) fund. The Fund is investing in early-stage ventures in Southeast Asia that are scaling solutions across climate…Continue Reading
Deal positions Salmon as one of SEA’s fastest-growing fintechs
Funds will enable firm to scale lending operations across Philippines
Consumer fintech Salmon announced that it has secured a US$20 million (RM91 million) debt facility from US emerging-markets specialist investment firm Argentem Creek Partners.
In a statement, the startup said this enables it to further scale its…Continue Reading
TOKYO – Despite campaigns and sanctions against Chinese-made 5G telecom equipment in the US, Europe, Australia, Japan and elsewhere, Chinese telecom giant ZTE’s share price has risen by 61% over the past year while rivals Ericsson and Nokia’s have dropped 30% and 22% respectively.
This surge-plunge comparison can be attributed to China’s greater commitment to building 5G base stations and its focus on the technology’s industrial application, of which China is the world-leading pioneer. ZTE is China’s second-ranking telecom equipment maker after Huawei.
Sweden’s Ericsson and Finland’s Nokia are paying a heavy price for their dependence on the consumer market in an inflationary and rising interest rate environment.
On July 14, Nokia’s shares plunged 9.6%, the biggest fall in two years, and Ericsson’s dipped 8.7% following disappointing company sales and profit announcements for the second quarter and the rest of 2023.
It was the second abrupt drop in Europe’s two leading telecom equipment companies’ shares so far this year. The first was in April in response to weak first-quarter earnings.
Both companies have been laying off workers and otherwise cutting costs in response to weak demand and excessive inventory, primarily in North America. As a result, their customers – mostly telecom service providers – have been forced to cut prices and postpone 5G projects.
On July 14, Ericsson reported a 3% year-on-year increase in sales (-9% excluding newly consolidated investments and changes in foreign exchange rates) and a 62% decline in operating profit (net of restructuring charges) in the three months to June.
Management said this was in line with their expectations. However, it was not in line with market expectations.
On July 20, Nokia reported a 3% year-on-year decline in sales and a 16% decline in operating profit in the three months to June.
Neither company expects much improvement in the second half and both are now hoping for recovery in 2024. India and Southeast Asia are bright spots in their otherwise generally dismal performance.
ZTE, on the other hand, reported a 28.5% year-on-year increase in operating profit on a 4.3% increase in sales in the first quarter of 2023. R&D spending was up, but the cost of goods sold was significantly reduced. As of this writing, ZTE had not yet announced second-quarter results.
At the Mobile World Congress held in Shanghai at the end of June, ZTE introduced its method of building “smart” automated factories connected with 5G industrial private networks.
Called “Industrial Field Network + ZTE Digital Nebula,” it includes centralized production and logistics control, energy management, environmental protection and security.
ZTE works with hundreds of industrial companies on energy-saving, emission reduction, operational efficiency improvement through digital infrastructure and the construction of low-carbon supply chains.
Last February, the company posted on its website an analysis of what is required to take 5G industrial applications from supporting systems to core operations, namely:
Integration of cloud, network and applications: End customers need a one-stop solution that can solve real problems for the core operation and improve efficiency.
Deterministic service assurance: The private network for the core operation needs to provide ultra-low latency and jitter, ultra-high reliability and zero packet loss.
Simplified operation and maintenance: To lower the barriers of 5G private network operation.
“Since the commercial launch of 5G, the application of 5G in vertical industries has developed rapidly, and multiple application cases with commercial feasibility have been incubated,” ZTE said on its website.
“According to China’s Ministry of Industry and Information Technology [MIIT], more than 7,900 5G 2B private networks had been built in China by September 2022, and the effect of 5G empowerment has gradually appeared in many industries such as manufacturing, ports, mines and power grid.”
Product development has been accelerated and production efficiency significantly improved, the company said.
Last March, MIIT set a target of 2.9 million 5G base stations to be installed in China by the end of 2023. At the end of June, the total was 2.94 million – the target reached six months ahead of schedule with about 600,000 units installed in the first half of the year.
All urban areas of any significant size in China are now covered, with the breadth and depth of coverage steadily increasing.
China now has nearly 700 million 5G mobile phone subscribers and more than two billion IoT (Internet of Things) connections to industrial sensors and consumer electronics devices. This has been accomplished since October 2019, when the first 5G services were introduced.
China’s state-run Global Times reports that 5G industrial parks have been set up in Shanghai, Dalian and many other cities. The first 5G IoT industrial park in the Xinjiang Uighur Autonomous Region is scheduled to be completed this month.
In 2018, ZTE established its Global 5G Intelligent Manufacturing Base in Binjiang, a district of Hangzhou, to develop and set standards for the technology.
Huawei is pursuing the same strategy as ZTE but on a larger scale. It is not publicly traded so its performance cannot be assessed by stock price performance.
However, Asia Times has reported: “Huawei claims 6,000 contracts to build standalone 5G networks for Chinese businesses, vs. about three dozen in Europe and fewer than 10 in the US.”
Market researcher TrendForce estimates that, by 2026, industrial manufacturing, energy and utilities will account for half the value of the global 5G market. Smart vehicles and consumer electronics will provide nearly a quarter.
This plays directly into China’s strengths as a rapidly automating industrial economy with a strong position in autos and consumer electronics, and a great need to use energy more efficiently.
GSMA, the global mobile network operators association, reports that “Mainland China is the largest 5G market in the world, accounting for more than 60% of global 5G connections at the end of 2022.
“With strong takeup of 5G among consumers, the focus of operators is now increasingly shifting to 5G for enterprises. This offers opportunities to grow revenues beyond connectivity in adjacent areas such as cloud services – a segment where operators in China have recently made significant progress.”
Japan is on a 5G track similar to China’s. NEC, Japan’s leading telecom equipment maker, has seen its share price rise over 25% in the past year, supported by a 28.6% boost in operating profit on a 9.9% increase in sales in the fiscal year ended March 2023 and management’s guidance for higher sales and profits this year.
NEC management says, “The impact of 5G will be felt not only by consumers using mobile phones. The real impact will change the way manufacturers design their plants, the way autonomous vehicles travel more safely, and the way healthcare organizations deliver more advanced and safer treatments.”
In factories, “5G makes real-time processing of a series of actions possible based on linkage between cameras and robots, namely capturing minute defects in articles flowing on the production line with high-definition cameras, identifying their characteristics in real-time with an AI engine and picking up the defective articles with a robot.”
NEC is transforming its own factories into 5G-enabled facilities, perfecting the technology and selling it to outside customers. Unlike the US, Japan never abandoned manufacturing.
On the contrary, it has led the world in factory automation and is making a major contribution to China’s automation as its leading supplier of industrial robots and is now likewise equipping its factories with private 5G networks.
Follow this writer on Twitter: @ScottFo83517667
IHG Hotels & Resorts today announces a partnership with Odom Living Co., Ltd. to introduce Vignette Collection to Phnom Penh in 2027.
Located in the heart of Cambodia’s bustling capital, the 50-room Vignette Collection Phnom Penh Odom will provide guests with an exclusive Luxury & Lifestyle destination and joins a family of distinctive, elegant, and intriguing luxury and lifestyle hotels. Created for the next generation of luxury travellers, each property is unique yet connected by a shared vision to make a positive change for people, place, and planet.
The second IHG Hotels & Resorts property to open in Cambodia – following Six Senses Krabey Island – Vignette Collection Phnom Penh Odom joins one of the world’s largest luxury and lifestyle portfolios with more than 450 open hotels and over 100,000 rooms. Vignette Collection is IHG’s first collection brand and joins Six Senses, InterContinental Hotels & Resorts, Regent Hotels & Resorts, Kimpton Hotels & Restaurants and Hotel Indigo.
Patrick Finn, Vice President, Development, South East Asia & Korea, IHG Hotels & Resorts said: “Vignette Collection is IHG’s newest Luxury & Lifestyle brand, and already growing quickly in many markets. It’s the perfect choice for partners seeking a distinctive identity for their hotel, while benefiting from our global scale, systems, and expertise as the second largest Luxury & Lifestyle hotel operator in the world.
“It’s been wonderful to work with Odom to bring Vignette Collection hotel to Cambodia’s capital city. Since launching in 2021, Vignette Collection has opened six properties in destinations including Brisbane, Bangkok, Porto and Washington, and grown a pipeline of 15 outstanding hotels. Over the next 10 years we anticipate a rapid expansion of Vignette Collection, reaching 100 properties globally, attracting guests who seek authentic, experiential and considerate stays.”
Kim Leang Kean, Odom Board Chairman and Founder of real estate developer ULS added: “Phnom Penh is a vibrant city with a rich history, incredible architecture, mouth-watering food and a unique culture, and we believe that Vignette Collection Phnom Penh Odom will further enhance its status as a must-visit destination.
“The Vignette Collection brand experience of authentic one-of-a-kind stays, each with its own distinct outlook and story to tell, is perfectly suited to attracting the next generation of travellers to this thriving city. Surrounded by an exciting mix of upmarket retail outlets, office spaces, hotel and residences, it will quickly become the place to be for visitors and locals alike.”
Located on the top seven floors of Odom Tower – the 45-storey office component of the mixed-use development ODOM, Vignette Collection Phnom Penh Odom is conveniently situated along Preah Norodom Boulevard, a major road in Central Phnom Penh. With its central location within the Tonle Bassac district, it will be close to many international embassies and Cambodian government agencies, as well as international businesses and non-government organisations.
Vignette Collection Phnom Penh Odom will feature 50 rooms and suites and facilities including two restaurants, a rooftop bar, a lobby lounge, a swimming pool, fitness centre, a members-only private club and four meeting rooms.
The brand has expanded quickly in Southeast Asia, with the opening of Sindhorn Midtown Hotel Bangkok, Vignette Collection in 2022, with the rebrand of Dinso Resort & Villas Phuket, Thailand following later this year and two further hotels in The Aquatique Pattaya and Bangkok Chinatown.
Vignette Collection, IHG’s first collection brand, is a family of one-of-a-kind properties in sought-after urban and resort locations where the next generation of Luxury & Lifestyle travellers can indulge in stays that weave responsibility, community and locality together, backed by the reassurance of the company’s trusted reputation and leading loyalty offer.
About IHG Hotels & Resorts
Held under the umbrella of InterContinental Hotels Group PLC holding company, IHG Hotels & Resorts is a global hospitality company, providing True Hospitality for Good. With a family of 18 hotel brands and IHG One Rewards, one of the world’s largest hotel loyalty programmes, IHG has over 6,000 open hotels in over 100 countries, and more than 1,800 in the development pipeline.
For IHG’s latest news, visit their Newsroom and follow them on LinkedIn, Facebook and Twitter.
About Vignette Collection
Vignette Collection is IHG Hotels & Resorts’ first collection brand. A family of one-of-a-kind properties in sought-after urban and resort locations where guests can indulge in a growing passion for stays that are authentic, experiential and considerate. Here for the next generation of luxury travellers seeking both discovery and purpose, Vignette Collection weaves responsibility, community and locality together for stays that are as distinct as our hotels.
For more information, visit vignettecollectionhotels.com.
About ODOM
Nestled in central Phnom Penh, ODOM is a world-class mixed-use development comprising two towers: the 45-storey Odom Tower, offering 40,000 sqm of Grade A offices; and Odom Living, featuring 22 floors of spacious one to four bedrooms apartments for modern families and professionals. The towers are connected by Odom Square, a five-storey podium with green and commercial space for communities to thrive.
ODOM’s lead developer is Urban Living Solutions (ULS), a Cambodian-owned company focused on community-centered development.
PUBLISHED : 21 Jul 2023 at 04:00
Asean has decided to use its homegrown mechanisms to ensure regional peace while remaining neutral amid global conflicts.
Usana Berananda, Director-General of the Asean Affairs Department, on Thursday said that Asean officials met during the 56th Association of Southeast Asian Nations Ministerial Meeting and Post Ministerial Conference from July 11 to 14 in Jakarta, Indonesia.
There, Asean determined it will use its Asean Outlook on the Indo-Pacific (AOIP) and the Treaty of Southeast Asia Nuclear-Weapon-Free Zone (SEANWFZ) to remain neutral, she said.
She said the AOIP was tabled during the meeting so members could use it to build cooperation with partners to reduce confrontations in the region.
The AOIP is an affirmation of Asean’s role in maintaining peace, security, stability and prosperity in the Indo-Pacific region. It aims to push open and inclusive dialogue on maritime, economic and connectivity issues.
Ms Usana said that currently, many Asean countries have their own Indo-Pacific strategy, which could be confrontational. Using the AOIP would ensure cooperation is inclusive without marginalising countries that may not have their own strategy, she noted.
The cooperation is also based on mutual prosperity in the region, she said. “We hope that our AOIP will be the heart that builds trust and cooperation while reducing confrontation and competition in the region.”
On the issue of nuclear weapons, she said there is growing concern over their potential use amid the current geopolitical climate. The SEANWFZ treaty was tabled during the meeting to serve as a framework on how the region can be free of nuclear weapons, she said.
She said there were attempts by Asean members to invite nuclear-capable countries to sign a protocol attached to the treaty as a way to deter the use of nuclear arms in the region.
“Some countries, like China, have shown their readiness to sign the protocol attached at the end of this treaty,” Ms Usana said. “Members have been talking about the details of the signing process. The experts are consulting [for] more details.”
She said Indonesia, as current chair of Asean, has shown interest in escalating the process during its tenure.
“If China signs, it will be good motivation for other countries with nuclear weapons to sign as well,” she said. “It will help build confidence that these countries will not use nuclear weapons in the region, which will help create more regional stability.”
Between the misty peaks of the Annamite mountains, animals as-yet unknown to science pick through primaeval forests.
Home to such endemic creatures as shimmering, iridescent snakes, the fancifully coloured douc’s langur and the saola, a rare deer-like animal also known as the “Asian unicorn”, the Annamites are a biodiversity hotspot.
But these densely forested mountains, which span the border highlands of Laos, Vietnam and eastern Cambodia, are increasingly under threat. A recent World Wide Fund for Nature (WWF) report celebrated the distinctive animals of the range while sounding an alarm that deforestation and an estimated multi-billion-dollar, illegal wildlife trade is gradually eradicating such creatures – leaving open the possibility that as-yet unknown species could be wiped out before ever being recorded to science. Even if humans are unaware of these losses, forests across the range are already bearing the ecological toll.
“As wildlife species disappear, their ecological roles are lost, and the forest changes too, in terms of composition, structure and function,” said Yoganand Kandasamy, a conservation biologist and senior author of the report.
Despite being considered a single range, the Annamites feature diverse habitats the WWF report describes as an “evolutionary laboratory”. These include limestone karst hills, mature secondary forest and patches of primary wet evergreen forest. The WWF notes the Annamites have one of the largest contiguous natural forested areas in continental Southeast Asia with nearly 11,000 square kilometres of habitat.
This has helped a number of endemic species to evolve.
Among these is the kha-nyou, a karst-dweller and so-called ‘living fossil’ first scientifically recorded in 2005 from specimens collected almost a decade prior in a Lao market. The sole surviving member of the Diatomyidae family, all other species in its taxonomic category are thought to have vanished more than 10 million years ago.
But modern history has left deep scars on the forests, which sustained heavy damage during the Vietnam War. More recently, according to data from Global Forest Watch, Vietnam has lost more than 740,000 hectares of humid forest in the past 20 years, contributing to about a 21% decline in total tree cover. WWF points out that much of this deforestation happened in the Annamites.
The mountains have held onto their habitat better than some lowland areas due to the difficulty of access there, but even with legally protected status, new roads and agricultural expansions have gradually crept up the slopes. This has also helped to open the mountains to enterprising loggers and hunters.
The preferred tool of many poachers in the Annamites, and elsewhere in the region, is the snare – a twisted loop of rope or wire used to trap animals indiscriminately. Such snares have contributed to what conservationists in the region call “empty forest syndrome”, in which habitats maintain their trees but are cleared of animal life.
Out of the suspected 12.3 million snares hidden in the undergrowth in the region, more than 120,000 have been removed from the Hue and Quang Nam saola nature reserves in Vietnam. This industrial-scale snaring crisis is fueled by market demands for meat, traditional medicines and exotic pets.
Snares are often sold in local village stores, and vary in materials and sizes. Some are made with car winch cables to catch larger animals while the more abundantly found are twisted motorbike brakes and clutch wires, explained Yoganand.
Even with substantial forest cover still remaining in the area, conservationists say the sheer volume of these snares are changing the Annamites’ natural character and ecological functions.
“[This is] because animal populations, which are integral to the forests, are being lost,” Yoganand said.
The loss of seed-dispersing animals such as the Annamites’ gibbons could favour the spread of more wind-dispersed trees, which are smaller and less dense than animal-dispersed ones. This change to the tree composition could result in lower carbon sequestration and storage by the forests, Yoganand explained, diminishing a crucial ecosystem service on which humans rely.
Many gibbon populations of the Annamites have already declined and are becoming locally extinct due to snaring – often to then be sold into the pet trade.
The local human populations play various roles in the wildlife trade and the longevity of Annamite endemics. The WWF said some communities have acted as good stewards, pointing to one in the Quang Binh province of Vietnam that has protected the Hatinh langur from illegal hunting for more than a decade.
But other locals are involved in the trapping and hunting to supply urban wildlife markets. Others are simply unaware of an animal’s endemic status and the role the species has in the critical ecosystem services of the forest.
From the perspective of the most vulnerable communities nestled along the Annamites and relying on it for subsistence, the short-term economic interests in the wildlife trade shroud the consequences of a decaying ecosystem.
“Well-functioning forests help vulnerable communities, often acting as a safety net to prevent people from further hardships during difficult times,” Yoganand said. “It helps them become resilient to climate change and other disastrous events such as prolonged droughts.”
Another Singaporean business, sofa maker HTL, expanded its production capacity into India in 2021 with manufacturing plants in both Chennai and Pune, in the western Indian state of Maharashtra.
The company hopes its presence in India will help to enlarge its footprint on the global stage.
“(India) has very strong domestic demand, and is a great place to export to different parts of the world, specifically to the US, UK, Middle East and even parts of Southeast Asia,” said the firm’s global brand head Celeste Phua.
With its two Indian facilities, the firm said it can cut down shipping time to regions like the Middle East by 70 per cent.
The large pool of skilled workers is also helping the company boost its productivity.
“The sofa is a handicraft item. So India works very well because a lot of the (workers can) sew and cut. India also provides a very rich and diverse labour workforce for us to tap on, and expand our manufacturing capacity,” Ms Phua said.
Some firms are also looking to harvest growing opportunities in India’s waste management sector, especially as the Asian giant puts in motion efforts to go greener.
This includes turning trash, such as disposed electronic goods, into precious resources.
Chennai is among the most populous cities in India and it produces more than 5,000 tonnes of waste each day.
With a pivotal election coming up, Cambodia’s informational authorities have kept an especially close eye on the unruly gardens of the Internet.
This week, ahead of Sunday’s balloting, authorities took steps to nip in the bud Kamnotra, an independent database of public information and the latest initiative of non-governmental organisation Cambodian Center for Independent Media (CCIM). The group launched the online tool less than a month ago to make official data more easily accessible in both English and Khmer languages and partially fill the void left earlier this year by the government-ordered closure of its news outlet, Voice of Democracy (VOD).
“I can not tell what the government is thinking. We intended for Kamnotra to be a public database of already publicly available information,” said Ith Sothoeuth, the centre’s media director. “But maybe the website contains information that the government thinks is not to their benefit.”
The order from the national Telecommunications Regulator to local Internet service providers to block Kamnotra comes a week before the Kingdom’s national elections, a contest that Prime Minister Hun Sen and the ruling Cambodian People’s Party (CPP) are all but guaranteed to win.
The run-up to the officially designated three-week campaign season had been littered with crackdowns, from the closure of VOD in February and the harsh sentencing of a former opposition leader in March, to the disqualification of the main opposition party in May. CCIM had attempted to continue its mission in some form through Kamnotra, but this swiftly joined the growing list.
The CPP, despite having virtually full control of every state mechanism, has left nothing to chance with the election, which sets the stage for the expected formation of a new government in August. After nearly four decades as prime minister, the 70-year-old Hun Sen will pass near-absolute power to his eldest son, military commander Hun Manet.
“The decision to block Kamnotra’s website less than one month after its launch constitutes the latest example of a series of oppressive decisions that severely threatens the freedom of expression in Cambodia,” said Chak Sopheap, executive director of the Cambodian Center for Human Rights. “Such decisions threaten democracy and the rule of law in Cambodia especially during the elections, a critical time for individuals to cast their vote and freely choose their representatives.”
The Record
Kamnotra, or “The Record” in Khmer, launched two databases in June: “The Gazetteer” and “In Dispute”. The first indexed laws and subdecrees published by the government’s Royal Gazette, while the second compiled years of reporting on land disputes in order to track conflicts.
“We digitised documents so everyone could access it, but simply making the database, it is not very useful,” Sothoeuth said. “We also created explainers, factsheets and analysis to make these dense documents easily understandable.”
This work went unhindered for less than a month.
On Monday, the Cambodian government ordered internet service providers to block the websites and social media accounts affiliated with Kamnotra, as well as the already banished news outlets The Cambodia Daily and Radio Free Asia. Both of the latter outlets were targets of the broader 2017 government crackdowns that centred on the forcible dissolution of the former opposition Cambodia National Rescue Party (CNRP). Though locally shuttered, the news outlets have continued to publish reports about the country’s current affairs.
This time around, a one-page order issued Monday by the Telecommunications Regulator of Cambodia stated the sites had “disseminated information causing confusion, undermining the honour and the prestige of the royal government”.
The document ordered the sites to be blocked within seven days, which would likely render them largely unavailable for the election.
“Depriving individuals of access to vital information to understand the electoral process, constitutes a serious limitation of their fundamental rights,” Sopheap said. “Without access to reliable information, it is challenging for Cambodian citizens to eloquently exercise their right to vote and elect political office holders.”
Meas Sophorn, spokesman for the Ministry of Information, said Kamnotra publishes content in the “form of news articles” which the website was not allowed to do for a reason he did not explain. He continued that the independent centre should “know very clearly how to be a legal media outlet” in a nod toward VOD.
He did not respond to Globe’s follow-up inquiries about if the decision to ban Kamnotra could be reviewed or contested. Based on precedent, however, the reversal of the decision seems unlikely – at a World Press Freedom Day event in May, Sophorn dashed hopes for VOD’s reopening.
Sothoeuth rebuffed the claim that Kamnotra was publishing news articles and said the ministry had given no prior warning before ordering it blocked.
“Our team will continue working as usual for now, updating the website. Even though Kamnotra cannot be accessed now, hopefully it will be accessible later. People can still access the site through other means,” he said. “Tools like Kamnotra are very important, especially before elections. People need to have access to these documents and data to make informed decisions.”
Recent updates to the database included summaries on title promotions granted to family members of Hun Sen; minor political parties failing to register poll agents; and land concessions given to tycoons with ties to the prime minister.
The Cambodian government has steadily worked to assert more control over the Kingdom’s digital landscape with plans for a National Internet Gateway, which would route the country’s internet traffic through a single, government-run portal. Though long delayed, such infrastructure would theoretically enhance the state’s ability to gather user data, block websites and disconnect Internet access at will.
The expected adoption of the Law on Access to Information, which was meant to be introduced in 2021, has also been slow to come together.
Kamnotra and the other blocked sites are still mostly accessible through a virtual private network, or VPN, which essentially hides a user’s browsing history and location. The software to create these private networks, however, often has to be downloaded separately and at an expense. The encryption process run by a VPN also requires more internet bandwidth, which can slow websites.
“I can not say what we are going to do next after the elections. From our side, we made our intentions clear that it was a database. We wanted everyone to have access to publicly available data,” Sothoeuth said. “Perhaps it is not strange that we see things differently than the government. Hopefully we will have a common understanding in the future.”
A version of this story was first published by sister title, AsianInvestor.
Infrastructure investors in Asia can promote a new, more ambitious role for capital in funding social and environmental development, according to Nikhil Chulani, investment director covering the industries, technology and services sectors at British International Investment.
“On the markets that we at BII focus on in Africa and South Asia, there are huge opportunities for growth and achieving greater scale,” he told an audience at the Sovereign Wealth Fund Institute conference in London in June.
“To accelerate progress in realising the potential of these opportunities, one key aspect is vision and ambition, and tapping into creative solutions via financial services sector to re-imagine the role of capital.”
The UK development finance institution currently invests between $1.5 and $2 billion per year in Asia, Africa and the Caribbean.
He noted that, as ESG investing broadens from a focus on people to include the environment, the scope of allocations, and the range of problems they address, is widening. He said developing bottom-up strategies is more important than ever.
Being able to clearly identify and articulate which problems investors are aiming to address with their allocation is crucial, he added, emphasising the need to integrate impact and financial return within an investment model.
“Having an impact doesn’t exist separately from investing, it is a core part of investing,” Chulani said, adding that, while many investors still saw the ESG potential of their investment as distinct from its investment potential, attitudes were changing.
Size matters
Michael Anderson, who was director general between 2010 and 2013 of the UK’s Department for International Development, a government department that was responsible for more than $6 billion in annual aid programmes, said that a pressing question for enterprises and projects with a social or environmental dimension was achieving the scale necessary to unlock large investments.
“It’s not that we need to do more to attract major investors, but when they are attracted they need to have the deal flow to enable large ticket sizes,” he said.
“Big investors with multibillion dollar funds can’t go after small deals,” he added. “The key challenge is thinking at a bigger scale, especially in areas beyond infrastructure.”
“There has been some good investment in green infrastructure, but not enough in other areas,” he noted, pointing to social services, social infrastructure, and businesses designed to have a positive social impact.
Anderson, who is founder and CEO of MedAccess, a social enterprise improving access to medical innovations wholly owned by the British International Investment, gave the example of essential medicines.
“The critical reason that these drugs are not getting into markets where they are needed is that the companies who manufacture them don’t find it commercially viable to sell into those markets,” he said.
Investors were essential in providing the “catalytic finance” to de-risk distribution into less profitable markets, he added.
Anderson gave the example of a recent TB drug project mediated by MedAccess, where the finance provided reduced the per dose cost from $40 to $15. MedAccess also facilitated increased production by the drug company and worked with companies to secure distribution.
“Sometimes this means lower margins [for manufacturers],” he noted.
Local opportunities
However, Ana Nacvalovaite, research fellow at the Centre for Mutual and Co-owned Business to Kellogg College, University of Oxford, speaking at the same session, said small-scale, local projects offered considerable opportunities for ESG investors, given their strong social and environmental credentials in many cases.
Such projects that are aimed at securing specific social or environmental outcomes often involve joint investment by development banks alongside sovereign and other institutional investors such as pension funds.
But those institutions best placed to provide such “blended finance” are not necessarily the biggest, Nacvalovaite observed, pointing to the example of funding for rural farm co-operatives in Rwanda.
“The [Government Pension Fund of Norway] has its hands tied, since approval is required by the ministry of finance. But Rwanda’s fund [the Agaciro Development Fund, launched in 2012] could trial this. It is the right size and Rwanda has lots of co-operatives, so they are looking at these blended finance opportunities,” she said.
Nacvalovaite said that while single project investments with a finite lifecycle might produce tangible environmental or social benefits during their lifetime, they also created challenges when they complete.
“The community that has been built up around it has to pack up and move on,” she said.
By contrast, financing co-operatives and employee-owned businesses provided longer lasting social outcomes. “We are talking about people creating their own infrastructures,” she said.
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Earlier this month, Singapore’s Accounting and Corporate Authority (Acra), together with Singapore Exchange Regulation (SGX RegCo), instigated a public consultation on a proposed set of mandatory climate-related disclosures (CRDs). The two bodies partnered in June 2022 to form Singapore’s Sustainability Reporting Advisory Committee (Srac).
The public consultation runs from July 6 until September 30, during which the public can access related documents through a portal on Acra and RegCo’s websites and submit feedback via a designated form. The two bodies (Acra and SGX RegCo) plan to consider public feedback and finalise the recommendations by 2024.
If further amendments are proposed to listing rules around sustainability reporting, a separate consultation will launch before the end of the year, SGX RegCo added in a press release.
The mandatory CRDs will require issuers listed on the Singapore Exchange (SGX) to report their climate impact in line with the standards set by the International Sustainability Standards Board (ISSB), starting from financial year 2025 (FY2025).
Similar requirements for large non-listed companies with annual revenue of over $1 billion will be mandatory starting from FY2027, according to the recommendations. In doing so, Singapore becomes among one of the first markets in Asia to consult on CRDs that are set to affect large, non-listed companies.
“To transition to a net zero economy, we need the critical mass to move the needle. With more companies adopting climate related disclosures, we are better able to drive actions and impact to meet our climate targets and make Singapore a better and more sustainable place for our future generations,” Esther An, chair of Srac told FinanceAsia.
New requirements
The new recommendations advance the city-state’s current reporting requirements, which were initially introduced in a phased manner in late 2021 to elevate Singapore’s role in Asia’s ESG arena and to uphold its position as a global business hub.
The market’s current CRDs require listed companies active in five prioritised carbon-intensive industries (finance; energy; transportation; materials and buildings; agriculture, food and forest products) to submit data related to their corporate climate impact.
However, the proposed amendments expand these requirements to all issuers listed on the SGX.
All SGX-listed corporates will be required to report their scope 1 and 2 emissions – those direct emissions that result directly from their activity or their production processes.
Corporates will also be required to submit data around scope 3 emissions – the indirect pollutants that result from the full breadth of a company’s supply chain. However, because these involve more complex calculation, Srac is offering companies one to two years to prepare for these reporting requirements before having to submit exact data, the press release explained.
“Scope 3 emissions are typically the largest component of many companies’ greenhouse gas emissions,” An elaborated to FA.
“To facilitate companies in making the disclosure, the ISSB standards have provided relief. For example, the standards allow the use of estimates to prepare this disclosure when the information cannot be obtained without undue costs and efforts,” she explained.
External assurance on scope 1 and 2 emissions provided by Acra-registered audit firms will be expected from all listed firms starting FY2027, and from large non-listed companies starting FY2029, according to the recommendations.
Dominoes
Commenting on the new disclosure requirements, Helge Muenkel, chief sustainability officer at DBS Bank told FA, “By starting with economically significant non-listed companies in Singapore, the goal is to eventually create a domino effect with better quality ESG data across the value chain, especially in relation to scope 3 emissions.”
As a Singapore-headquartered lender, DBS has been an active participant in Singapore’s sustainability effort. The bank announced in early July that it had upskilled over 1,600 institutional banking relationship managers and 170 credit risk managers to deepen their knowledge of sustainable financing practices, in order to better help corporate clients navigate the sustainability landscape.
Last September, market regulator, the Monetary Authority of Singapore (MAS) and SGX collaborated to launch a platform, ESGenome, aimed at enhancing companies’ ESG reporting processes, FA reported. The assistance provided by the capability includes processes for sustainable procurement across supply chains.
To further facilitate large non-listed companies that are new to climate reporting, Srac suggests that scope 3 emissions need only be disclosed in the third year of mandatory reporting, An added.
The Srac team confirmed that mandatory CRDs for large non-listed companies with revenue over $100 million is set to commence from FY2030, but this timeline will be further reviewed in 2027, depending on the outcome from implementation of the current recommendations.
“With more countries pledging for net zero and the rising carbon cost globally, climate strategy and reporting can help companies, listed or non-listed, to mitigate and adapt to risks in the transition to a low carbon economy,” An said.
Whether the requirements will expand to include other aspects of ESG-related reporting remains undecided. The recommendations begin with CRDs as a starting point, An said, emphasising the urgency to combat climate change.
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