The Rise of Corporate Ethics in ASEAN

Note: if you missed the 24th May webinar or want more information:

1. You can download the webinar recording here
2. You can download the slides from the different speaker presentations here

New ethical issues

In the ASEAN region, new ethical issues for companies appear every day. How to take the right ethical position on Myanmar? How to ensure diversity and inclusion when national labour laws preserve certain forms of bias? Where to draw the line on artificial intelligence applications that select, track, assess and discipline workers? How to reduce human slavery in the supply chain where Asia and the Pacific top the Global Slavery Index for forced labour exploitation, forced work by state authorities and forced sexual exploitation ? How to ensure fairness and protection for the contingent workforce of your company? How to put your company's communication of purpose beyond profit into action? How to make an impact with your company's social responsibility policy? How to ensure compliance with sustainability targets?

The COVID-19 pandemic has become a watershed event for ethics: the consensus is that the economy and society must contribute to each other for a sustainable future and collaborate on common challenges beyond national interests.

Creating an ethics think tank for ASEAN

The idea of establishing a Civil Society Organisation for ethics came out of exchanges in 2020 among the ASEAN Human Development Organisation (AHDO), the Foundation for International Human Rights Reporting Standards (FIHRRST) and the ASEAN University Organisation (AUN).

The purpose of the Ethics Council and Advisory for the ASEAN Region (ECAAR) is to identify and discuss ethical issues that are sufficient to be addressed at the level of the ASEAN regional community. As a council, ECAAR provides a space for dialogue among stakeholders on such issues. As an advisory, ECAAR generates recommendations based on expert views, fact-finding missions and science. ECAAR is neither a court of law nor the proponent of political, moral or religious doctrines.

Ethics is at the heart of higher education where the question “what do I need to know?” is accompanied by the question “how should I live?”. But recently companies have become more aware of their ethical responsibility and their power to do good.

New ethical functions in companies

To be capable of handling diverse ethical responsibilities, companies have created new functions: head of Ethics and Compliance, head of Corporate Social Responsibility (CSR), head of Diversity, Equity, Inclusion and Justice, head of Sustainability as well as foundations to contribute to targeted ethical issues.

On 24th March, the ECAAR founders, along with the ASEAN Business Advisory Council and the ASEAN CSR Network, invited outstanding representatives of these new functions to explain what they do and share their experience.

You can listen to the complete recording of this webinar using the link at the top of this article. Here, in a nutshell, are the essential points they made - with my thanks to the ASEAN University Network team for organising the webinar and taking notes of the discussion.

ASEAN companies and international corporate ethics rankings by Dr. Wit Soontaranun - Executive Vice President, DTGO

DTGO is currently recognized as one of the world's most ethical companies and received the Ethisphere Institute Award in 2019 and 2020.

DGTO was founded with the stated purpose of nurturing a better quality of life in the business of property development.

The company invests 2% of sales. Most companies contribute a percent of profits but in a bad year with no profits, the ethical investment can stop. DTGO focuses on long-term sustainable giving.

Dr Wit concluded with a reminder that “Ethics is about doing not planning - the most important thing is acting from the heart."

Mun Ching Yap - Executive Director of the AirAsia Foundation and Sustainability Director

The Air Asia Foundation focuses on supporting social entrepreneurship and small businesses through granting funds, business mentorship for brand relevance. It is linked to AirAsia’s network which supports the sale of social enterprise products through AirAsia.

AirAsia recently created the position of Sustainability Director to manage a commitment for the airline to meet sustainability targets.

One of the most important ethical activities of the Foundation is to detect human trafficking. Ground and flight crews are trained to identify human slavery in the transportation of passengers.

New Ethical Roles in Corporate HR by C.Rajashree Mogan - CHRO at FLOW

Flow is new company whose purpose is to transform unsecured consumer finance in Asia through ethical, AI-enabled collection strategies and systems. Shree Mogan is the CHRO of Flow.

Traditional HR is derived from a traditional model that defines HR in business support roles, but HR is now taking a leading role in social impact and social commitment. New roles such as DEI (Diversity Equity and Inclusion) and sustainability show how the function is heading in a new direction. In ASEAN we are at an early stage in recognising the need for with LGBT (Lesbian, Gay, Bisexual and Transsexual) fairness for workers where attitudes and policies vary across ASEAN countries.

COVID-19 was a real accelerator for HR visibility and leadership. HR implemented working from home, prevented prevent mass layoffs, supported employee health, and worked with governments on funding and social action.

The danger is that companies simply treat these ethical issues as a "tick the box" exercise to be compliant.

Most ASEAN companies are just beginning to implement these new functions but we can see the shift to a more proactive and strategic HR function in the region. Until recently ASEAN lacked a strong HR professional network in the region.

Corporate Responsibility for Ethics and Compliance by Sharmini Lohadhasan of bp

The multinational bp is an energy company with ethical goals such as including becoming a net-zero carbon company by 2050, transitioning from oil producing to integrated energy company, and creating long-term value for shareholders.

The job of Ethics and Compliance at bp includes:

• Communicating the set of values and principles of the organisation to reflect the business in a simple and easy to access way
• Making it clear what we stand for
• Leading by example
• Make integrity a habit thoughout the workforce

The contribution of an ethics professional in a company must go beyond complying with regulations.

Rising Ethical Investment Challenges for ASEAN Companies by Mikkel Larsen - Chief Sustainability Officer, DBS Bank

Money has an ethical impact since finance is at the core of business decisions and capital allocation. What is called ESG investing includes a spectrum of Environmental, Social and Governance priorities and my role at DBS Sustainability is on these issues.

1. Traditional Investors primarily care about risk and return. For this category there is no focus on ESG; it is a profits-first approach.
2. ESG Investors, on the other hand, focus on risks & opportunities and they rely on ESG ratings to tell them where they can invest. They are also called impact investors;
3. A third category are philanthropists, where the impact comes first and the return on investment is long term and may have a high risk.

Today there is a 2.5 trillion dollar investment gap annually for financing the UN Sustainable Development Goals, as most investment goes to developed western countries and not going to quality education or clean water in areas like Sub-Saharan Africa or Southeast Asia.

At DBS we recognise the need for ESG investing and we help companies make the transition from a "brown company" to a "green company" in order to qualify for ESG investment.

How an Energy SOE Contributes to UN Sustainable Development Goals by Arya Dwi Paramita - VP CSR & SMEPP Management at Pertamina

Pertamina is an Indonesian State-Owned Company whose mission is to ensure the energy needs of the country. My role for Pertamina's sustainability contribution focuses on two things:

1. Environmental Responsibility (Wastewater treatment, reduction of greenhouse gas emissions and energy management.
2.  Social Responsibility including safety management of workers and customers, community engagement, and workplace equality.

At Pertamina we have mapped how ab Indonesian state-owned enterprise contributes to the UN Sustainable Development Goals (SGDs). These are

• Mitigating risk in environmental impact
• Incorporating SDGs into the national long term development plan
• Creating environmentally friendly energy with initiatives towards green
• Diversification of energy sources including geothermal, solar, biofuels

We use a Community Development Approach by introducing new energy substitutes in the community to reduce subsidized gas, bring awareness to climate change, promote renewable energy, preserve our sustainable forests, improve energy cost efficiency and develop our production capacity.

Where is ASEAN now?

Participants of this webinar were of all ages and included students, academics, company employees and government employees. In a questionnaire at the beginning of the webinar, participants reported that ethics is an important part of business. They also thought that, although Western companies have traditionally led initiatives, ASEAN is as aware and engaged is ethics as other regions.