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Asia has a greater imperative to drive sustainable development than most. Home to the world's fastest-growing and most rapidly industrialising economies, the region is in a unique position to affect global climate outcomes while also being extremely vulnerable to the effects of climate change.
The stakes are very high. In Asia, temperatures are rising twice as quickly as they are globally, and this is linked to a rise in the frequency and intensity of weather-related natural disasters. Currently, Asia produces about half of the world's carbon dioxide (CO2) emissions and contains five of the largest greenhouse-gas-emitting countries.
It's crucial to recognise that most of Asia’s emissions are from upper-middle-income economies, with the mainland China market alone accounting for 61% of the region’s total. Despite this, the region most vulnerable to climate change still lags behind Europe and the US on corporate sustainability legislation.
"It’s frustrating because we live and work in a region where we can see and feel the impact of climate change all around us, but seemingly it’s not enough to persuade brands and consumers to make sustainable changes," says Suzy Goulding, head of sustainability, Publicis Groupe APAC and MEA.
However, the region's sustainability journey is not all bleak. There is significant potential for change and improvement.
There is definitely some progress on the sustainability agenda, but the pace of change differs by sector. In the automotive industry, there has been rapid adoption of electric and hybrid vehicles. Asia-Pacific has the largest share of the battery electric vehicle (BEV) market worldwide and has higher growth in electric vehicle sales than Western markets. China leads the world here, with 8.1 million new electric car registrations in 2023, representing a 35% increase from 2022. Alongside Japan and South Korea, the three East Asian countries are industry leaders in electromobility worldwide.
With brands like BYD, Asia-Pacific has the largest share of the battery electric vehicle (BEV) market worldwide and has higher growth in electric vehicle sales than Western markets.
On the other hand, many Southeast Asian markets are still developing their regulatory frameworks for sustainability. Companies across the region are investing in upskilling their sustainability capabilities and improving product designs.
"This doesn’t mean that these markets are behind the curve," says Irwin Raj, APAC head of sustainability, Dentsu. "Many of them are strong advocates for forest conservation, wildlife protection, and pollution control. Therefore, it is worth noting that the sustainability priorities in these markets are just different."
Western Europe currently leads in sustainability regulations, having recently rubber-stamped meaningful laws such as the Corporate Sustainability Due Diligence Directive (CSDDD), a ban on carbon neutrality claims, and the Nature Restoration Law.
In Asia, legislation is lagging, but there have been encouraging developments, such as increased scrutiny.
Sustainability barriers for brands and consumers
The unsteady economic outlook, rising living costs, and increased costs of doing business in many countries in the region often mean that sustainability is pushed down the list of priorities for both consumers and brands.
"For brands, it’s often a perception issue—the belief that making a business or product more sustainable is always expensive," says Goulding. "This may be true in some cases, particularly when product innovation is involved, and there are upfront costs, but ultimately, if they take a more long-term view, sustainable development will likely result in cost savings and other efficiencies."
On the consumer side, the key drivers to purchase—cost and convenience—remain, and sustainable products often cost more or just aren’t as accessible to a lot of people.
"We also live in a region where many countries are still developing, and so buying sustainably quickly falls down the list of priorities when there are other much more pressing quality-of-life concerns," adds Goulding.
While sustainable products are often seen as more premium in Asia, that’s not to say that consumers here won’t buy them. Mintel’s Global Consumer survey found that 70% of Filipino consumers said that if a healthy food or drink brand or product was sustainable or environmentally friendly, they would feel more motivated to buy it. In other words, 'sustainable' could be an added perk for consumers.
However, sustainability isn’t the consumer’s sole responsibility. Over half (59%) of Indonesian consumers strongly agree that they expect brands to take the lead in addressing environmental issues.
"Most consumers everywhere want more sustainable products but are reluctant to pay more," says Andy Wilson, founder of Singapore-based sustainability-focused agency Early Majority. Companies can’t profit from more sustainable products, so they are not innovating or scaling in a way that will reduce their cost base and make these solutions more affordable."
Sustainable brands like Oatly have found success penetrating the APAC market, proving that the consumer appetite is clearly present.
And while the sustainability premium is a major factor, there are other barriers that stem from non-price-related issues.
"There is a critical problem with misinformation and trust when it comes to sustainability," says Marta Bigio, SVP, sustainability lead, Weber Shandwick. "People often do not trust that products are truly sustainable, do not understand the labels, or simply lack information. These are fundamentally communication issues that we can help address."
Typically, four main barriers exist to closing the value-action gap (the gap between consumers’ sustainable intentions and real-world actions). These are knowledge, cost, convenience and the risk of trying something new.
Research by Kantar found that nine in 10 people in APAC want to live a sustainable lifestyle, but only one-third actively change their behaviour. Six in 10 are prepared to invest time and money to support companies that try to do good, and more than half actively seek ways to offset their impact on the environment and have stopped buying certain things because of their impact. The massive gap between intention and action has yet to disappear, making companies' role in solving these tensions even more critical.
"Asia has the potential to leapfrog other regions with new business models; in the same way, we have seen the region lead the digital transformation through the 'Mobile First' approach," says Trezelene Chan, sustainable transformation practice lead APAC, Kantar. "But business leaders must shift their mindsets from viewing sustainability as a matter of cost and risk management to one of value creation in order to unlock the commercial opportunity."
Change is possible
Sustainability is influential in brand growth and can significantly impact a brand’s perceived meaningful difference.
"We know that sustainability when communicated right, can deliver greater ad distinctiveness and can predispose more people towards the brand," says Chan. For brands to translate this opportunity to commercial returns, brand owners need to make sustainable options easier to buy by being more present where it matters and offering sustainable options at mainstream price points. The success of brands like plant-based dairy alternatives Oatside and Oatly and electric car brand BYD should serve as inspiration to brands in the region."
Looking to the future, Asia's middle class is increasing, particularly in China and India. Their robust economic growth and expanding population will make the Asian middle-income consumer the world's new driver of consumption.
"As consumer pressure increases and international regulatory pressures mount, I am confident that Asia will see significant advancements in sustainability," says Bigio. "Understandably, this progress will occur at different paces depending on the economies. We must remember that 'Asia' encompasses half of the world's population, with significant social and economic disparities between countries influencing sustainability advancements."
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