PwC's Sammie Leung on meaningful target setting: Select ESG matters highly relevant to business identity, strategy
Discover how businesses can navigate the complex world of sustainability and governance.
In today's rapidly changing business landscape, the topic of Environmental, Social, and Governance (ESG) has gained immense prominence. Companies across the globe are increasingly recognising the significance of incorporating ESG principles into their operations and strategies. ESG has transcended its initial role as a mere compliance exercise and has become a central element of corporate strategy and identity.
Sammie Leung is a Partner at PwC and holds the position of Regional ESG Services in Asia Pacific. Her role encompasses a wide array of responsibilities, including assisting clients in setting science-based targets, decarbonisation strategy design and implementation, and aiding companies in their journey towards effective ESG adoption.
As a founding member of the Hong Kong and Mainland China team of over 600 ESG professionals at PwC, Leung has a deep understanding of the intricacies of ESG. Her role covers markets in Singapore, Hong Kong, and Greater China, offering four key services: ESG Strategy and Transformation, Climate Risk and Resilience, Decarbonisation, and Disclosures.
In this interview, we delve into Leung's profound insights and recommendations for businesses looking to make meaningful strides in the realm of ESG. We explore her perspectives on the evolving state of ESG practices, strategies for setting meaningful targets in environmental, social, and governance areas, and the challenges and opportunities faced by companies in the Asia Pacific region as they integrate ESG principles into their operations.
You've been at the forefront of the ESG movement in Asia Pacific. Can you share your perspective on the current state of ESG practices in the business community in this region, and how have you seen it evolve over the years?
I’ve truly been enjoying working with C-suites in the ESG agenda over the years. The ESG movement has evolved from a disclosure compliance-driven exercise to an integration of business strategy across organisations. It’s clear that the business community has been increasingly knowledgeable about the topic and is getting more sophisticated in identifying and addressing their ESG risks. Businesses are also gradually switching from a reactive to a more proactive approach, and a number of early movers in the region have been working hard to leverage the ESG movement to achieve competitive advantages.
ESG is a multifaceted concept encompassing environmental, social, and governance aspects. In your experience, how can companies effectively prioritise and set meaningful targets in each of these areas?
For goals and target setting to be meaningful and successful, companies shall select the ESG matters that have high relevance to their business identity and their growth strategy, as well as their industry sector and locations where the company is operating. To be successful in tackling ESG aspects, the targets have to be translated into interim milestones with specific actions that can be measured and monitored. Surely, buy-in from the top leadership of the company will be crucial for a successful implementation and an increasing size of companies are taking steps to establish linkage between remuneration and ESG performance.
Your role involves assisting clients in setting science-based targets and implementing decarbonisation strategies. What are some key strategies and best practices you recommend for companies looking to reduce their carbon footprint and align with global sustainability goals?
We do assist many companies in target setting, including the adoption of science-based target initiatives (SBTi). Whilst every company and every industry sector have their own unique challenges and opportunities when it comes to reducing its carbon footprint, it is key to have a tailored approach that works best for the client in their journey towards decarbonisation. For example, companies can set many types of goals for reducing their carbon footprint, including emission reduction goals, energy efficiency goals, as well as goals for increasing the uptake of clean energy and low-carbon solutions.
Can you shed light on the key challenges and opportunities you see for businesses in Asia Pacific when it comes to integrating ESG principles into their operations and strategies?
Asia Pacific will continue to be a strong growth engine for the world economy. It is key for companies to navigate the evolving global ESG-related policies switch and stay ahead of the game. For instance, how will the EU CBAM rules affect the export and logistics businesses in the region? A common challenge for businesses in the region is to quickly and effectively build the talent pool and bridge the knowledge and data gaps in meeting increasing demand from multiple fronts.
There are however tremendous opportunities in the ESG space and the region will be increasingly instrumental in the ESG movement. This is a region of the supply chain; it is also a region of biodiversity and the energy transition happening. It is crucial for business leaders to adopt ESG integration with a systematic approach towards inclusion of ESG factors through a robust strategy and governance structure with clear roles and responsibilities and decision-making processes.
Looking ahead, what do you believe will be the most critical trends and challenges in the ESG landscape, and how should companies prepare to address them?
Be mindful about the greenwashing risks - consumers, investors, employees and regulators are becoming ever more alert to false or exaggerated ESG claims. Consumers and investors will also be asking about the quality of ESG actions, with greater translation of ambition to action and genuine transparency.
Supply chains will come under greater scrutiny from consumers and investors – from emissions and environmental impacts through to labour and governance practices.
Sustainability in supply chains will be a key criterion for investment decisions over the next decade as investors increasingly seek evidence of integrity, circularity, and alignment with frameworks such as UN Sustainable Development Goals. How businesses tackle the social aspects of providing a safe, equal, and fair work environment for their people and the community will also be key.
As a judge at the ESG Business Awards, what criteria do you look for when evaluating companies' ESG initiatives?
When my team and I evaluate the entries from the companies for the ESG Business Awards, we focus on tangible actions that the applicants provided and how those initiatives differentiate them to their peers in terms of creating ESG impact.
