Most Southeast Asian nations face risks to their environmental, social and governance (ESG) performance as the aftermath of the pandemic slows the process, according to a recent report.
International consulting firm YCP Solidiance said Singapore was the only Southeast Asian country with a low ESG risk score, tallying 34.9.
Cambodia, Myanmar and Laos have high risks regarding their sustainability, with scores of above 50.
Thailand's risks are considered at a medium level, scoring 43.1. The Energy Ministry plans to increase the share of renewable energy to 50% of the mix used to generate electricity by 2050, achieve carbon neutrality by 2050, and hit net zero greenhouse gas (GHG) emissions by 2065.
"The region is confronted by large and interlinked ESG challenges, including inefficiencies related to coordination among governments and a lack of alignment across countries in the region," noted the report, conducted in collaboration with Rimm Sustainability, a management software as a service platform.
A 2022 report by Bain & Company, Temasek and Microsoft indicated that 85% of the total primary energy supply in Southeast Asia is from non-renewable sources, while carbon dioxide emissions in the region are expected to increase by up to 2,400 tonnes by 2040.
Governments in Southeast Asia have pledged to achieve net-zero emissions between 2050 and 2065 through nationally determined contributions, following the ratification of the Paris Agreement.
The commitments include gradually reducing the reliance on fossil fuels to meet surging energy demand.
"The region is not on track to achieve any of the 17 sustainable development goal targets by 2030," according to a 2022 UN report.
"Higher income levels in the region have contributed to increased material footprint and consumption. Unsustainable consumption patterns have contributed to a massive increase in GHG emissions, thereby intensifying the level of the climate emergency in the region."
The YCP survey also revealed that companies in Southeast Asia continue to lag behind their American and European counterparts in terms of meeting emissions reduction targets and the percentage reduction of carbon dioxide emissions.
In addition, only Malaysia (68.8%), Thailand (66%) and Singapore (58.6%) have a high proportion of firms with environmental supply chain policies.
Vietnam and Indonesia have less than 40% of companies with environmental supply chain policies.
According to Singapore's DBS Bank, the region requires US$3 trillion in green investments between 2016 and 2030 to facilitate sustainable recovery. However, there is a financing gap of roughly 50% of the target, partly owing to the impact of the pandemic.
"Focusing on sustainable growth opportunities can result in substantial economic advantages for Southeast Asia, as green growth sectors are anticipated to boost overall development and enhance the welfare of the region's population," said YCP.