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STREETWISE
Sustainability still not on investors' radar
Achara Deboonme

The now-familiar queues snaked from shops last week as the iPhone 6S was made available for pre-order.

BANGKOK: -- Apple has become the envy of companies around the globe for its spectacular success in winning the hearts of consumers, in the process becoming the world's most valuable brand.

Yet, despite its impressive revenue records, Apple does not lead the pack in terms of sustainability. In the latest Dow Jones Sustainability Index (DJSI), South Korea's LG Electronics is the industry leader in the consumer durables and apparel sector. In fact, Apple has never once rated as a top performer in the index, which evaluates companies according to their economic, environmental and social performance.

The Carbon Disclosure Project (CDP), which discloses the greenhouse gas emissions of major corporations, reported that Apple ignored its requests for information between 2011 and 2013. Since 2014, Apple has submitted its strategies for coping with climate change, receiving an "A" grade for its 2014 strategy. But the tech firm failed to respond to a request for data on its water consumption.

Eco-conscious investors now have a number of rankings they can consult to get an idea of which companies they should invest in. Aside from DSJI and CDP, there's the Good Company Index and Newsweek's Green Rankings. The latter ranked Apple the 18th "most-green" company this year.

That rating for the globe's biggest brand will disappoint environmentalists. The world is now being threatened by corporate activities that are changing climate patterns, yet most for most firms it's business as usual. The next UN climate conference, COP21, is little more than two months' away and will decide the global response to what many scientists warn is an impending catastrophe. Any readers interested in testing their knowledge about the summit (and learning more) can take the quiz at https://ubishaker.com/game/quizz. I bet few will get the maximum 10-points score.

Yet, most stock investors would place concern over the climate low on their list of motivations. Apple Inc shareholders have seen their investment soar 192 per cent in the last five years, as the share price climbed from US$39 in September 2010 to $114.21 as of Friday. It seems these investors care far more about the firm's financial performance than about its environmental strategy.

The picture should be the same in Thailand.

Last week, the Stock Exchange of Thailand was boosted by news that 13 Thai companies had made it onto the 2015 Dow Jones Sustainability Index. They are Advance Info Service, Airports of Thailand (AOT), Banpu, Charoen Pokphand Foods (CPF), Central Pattana, IRPC, Minor International, PTT, PTT Exploration and Production, PTT Global Chemical, Siam Cement, Thai Oil and Thai Union Frozen Products. The number rose from 10 last year, as Advanced Info, AOT and CPF added their names to the list.

The good news is that Thai Oil is also rated the Energy Industry Group Leader, beating companies from all over the world. It took over the top ranking from UK-based BG Group in 2014 and retained the position in 2015.

Thai Oil earned praise for its group-wide Sustainable Development Master Plan 2014-2018, which covers areas such as environmental protection, economic growth and enhancing society's well-being. In 2014, the firm increased production of biodiesel from 94.10 to 124 million litres, which, in turn, contributed to lowering its greenhouse gas emissions. In addition, 76 per cent of the burners in its furnaces were replaced with ultra-low Nitrogen Oxide devices, and another 20 energy efficiency improvement projects were completed in 2014. Furthermore, recognising that employees are key to business success, Thai Oil this year enhanced staff development through capacity building, leadership and training, and has expanded its knowledge management system. Yet, though such strategies have helped grow its customer base by 8 per cent since 2013, Thai Oil's share price has moved in the opposite direction to Apple's over the past five years, falling by about a quarter. In the past year, its share price has risen by a modest 0.5 per cent.

A firm's inclusion on the Sustainability Index should boost confidence that its environmental, social and corporate-governance performance would lead to continuous and sustainable growth and, ultimately, good long-term returns for investors. But that may be true only for those investors concerned about factors beyond short-term profitability.

How many Thais know that Thailand was ranked top on the Asean Corporate Governance Scorecard for the third consecutive year in 2014? Two Thai firms were among the top five while 24 Thai companies made the top 50, up by six from 2013. The Scorecard rates a total of 550 Asean firms.

Being oblivious towards corporate social and environmental practices is equivalent to ignoring human activities that increase the world's vulnerability to disaster. We can no longer afford to ignore the growing signs, witnessed most recently in the devastation brought by powerful storms in the Philippines and Myanmar

A Swiss man recently asked me: "Is it true that Bangkok's summer temperature is now an average 1 degree higher because of air-conditioners?"

I answered that the rumour could well be accurate: new condominium blocks are mushrooming, and each room has at least one air-conditioner.

I should have added that in summer, when power plants run at full capacity, Thais don't scale down even their mobile phone usage. We should pressure manufacturers like Apple to deliver more energy-saving innovations. Business-as-usual is no longer a sustainable approach.

Source: http://www.nationmultimedia.com/opinion/Sustainability-still-not-on-investors-radar-30268780.html

-- The Nation 2015-09-15

[Srikcir]

They need a Sustainability of Military Coups Index.

Then Thailand would be Number 1.

[wabothai]

Why do Thai have a love affair with the word sustainability?