ESG in Asia Pacific: trends and opportunities

Explore the dynamic ESG landscape in Asia Pacific and learn from Kamran Khan, Deutsche Bank's APAC and MEA Head of ESG, about key drivers and future trends.

Asia Pacific plays a crucial role in addressing global sustainability challenges. As a region with significant economic influence, the actions taken here have far-reaching consequences.

Deutsche Bank’s Head of ESG for Asia Pacific, Middle East and Africa, Kamran Khan explains the current state of ESG (Environmental, Social, and Governance) in the Asia Pacific region and the key drivers and future progress of ESG in this dynamic market.

ESG adoption in Asia Pacific is driven by consumer demand, brand protection, and cost-effectiveness. The region sees growth in sustainable manufacturing, particularly in renewable energy, attracting significant investments. Aligning private sector efforts, consumer demands, and government regulations, is critical for long-term success says Khan.

Video Navigation: Jump directly to the parts of the video you're interested in:

Current state and progress of ESG in Asia Pacific (00:10)
Short-term and long-term outlook (01:47)
Top ESG opportunities in Asia Pacific (03:24)
Deutsche Bank's role in supporting clients' net-zero goals (05:00)

You can also read the full transcript of the video here:

What is the current state and progress of ESG in Asia Pacific?

Rubber hits the road right here in Asia. If we don't incentivize Asia to be marching forward on the sustainability challenge, we're not going to be able to solve the global climate change puzzle.

And so, from that standpoint, what we're seeing now in Asia is that Asia based enterprises, certainly the large ones who sell overseas under their own brand, as well as companies that are headquartered in Europe and North America and elsewhere who have significant exposure, commercial exposure to Asia are continuing to move forward on their sustainability strategies.

They in Asia know that they have to get their house in order, in order to protect their brands, because the consumers still demand that they wear brands, and they associate themselves with brands that are responsible. So, a multinational corporation has no choice but to continue to march down that path.

It's also important for them from a purely commercial standpoint, which is to not just differentiate themselves from other competitors, but also to explore more cost-effective technologies and better digitized, visibility on their operational platform, which increasingly ESG and sustainability options provide.

What is your short-term and long-term out-look on ESG adoption?

Natural disasters are not going away. They're actually compounding. So, the long-term view is quite simple for the world. Not just the economic players, but everybody. We have to do something about it. And people are demanding that something be done about it.

We do need some patience for the entire system to come together, with the private sector trying its best, consumers demanding certain changes, and governments being forced to consider difficult decisions.

So, I think long term I am very optimistic we will make changes that are required. The mid to short term I think is going to be good quality, credible transactions and examples of what sustainability looks like in real life.

Companies that are doing ESG and sustainable finance transactions now are the ones who are very serious about it because they have incorporated sustainability in their commercial plans, in their branding strategies, in their partnership strategies.

And therefore, sustainable finance is not a cost center for them. It's not a public relations thing only. It's also about how they operate as a company.

What are the top ESG opportunities for growth in the Asia Pacific region?

40% - 50% of all new investments are coming here. So, we have the opportunity to set the right systems, sustainable systems for that manufacturing and production.

And one good example of that is the renewable energy industry.

Asia Pacific is already becoming the largest market for renewable energy. Manufacturers who are manufacturing in Asia Pacific, they want to make sure that they utilize renewable energy as much as possible, because if your product is produced with renewable energy, you are more likely to have a product that does very well on the sustainability tracking.

It gives that product better position in the market. It allows that product to past through a variety of customs requirements that are coming up around the world related to sustainability.

So that's the opportunity. First and foremost, focus on what is happening here.

Make sure we set it up in as clean a possible way as possible. And then have the right kind of ingredients, incentivize suppliers, local players to also join that forum so that the products produced out of Asia are more sustainable that they have been in the past.

How is Deutsche Bank helping clients achieve net-zero goals?

Our role as a global European headquartered bank, is to make sure that our clients are able to operate in Asia and operate at the same standards that they operate at in Europe.

We've been very, very successful in that, both for Asia based companies who want to meet international standards, and Europe and North America and other headquartered companies who want to make sure that Asia operations are international standards.

That requires advice, very customized, very focused advice to a company for the specific market that they are focused on for the specific point in time that they have a need.

So very customized, bespoke solutions that involve helping companies transition towards sustainable practices, putting in place systems to track data, on material KPIs and putting in place reasonable, practical, reliable systems for reporting that, to the public at large and investors.