Driving Sustainable Progress: The Role of Digital Economy Companies in Southeast Asia

Driving Sustainable Progress: The Role of Digital Economy Companies in Southeast Asia
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Digitalization continues to drive Southeast Asia's post-pandemic economic recovery and transformation. Digital Economy Companies (DECs), which act as creators, distributors and users of digital technologies, play an important role in this process.

Citing the World Economic Forum, the Tech for Good Institute (TFGI) and the Center for Governance and Sustainability (CGS) at the National University of Singapore have studied 439 digital economy companies in Southeast Asia. This research not only analyzes the financial impact, but also highlights the main focus of digital economy companies in the "SEA-6" countries (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam), namely the issue of "operating licenses" including cybersecurity and data protection.

Unfortunately, environmental impact is still not high enough on the agenda of Digital Economy Companies (DECs). While 85% of companies declare their sustainability and impact intentions as corporate information, less than half have implemented initiatives to realize these intentions. 

Only a quarter of DECs formally report on their non-financial impacts with clear metrics and targets. Given the "say-do" gap, health promotion organizations have an opportunity to create positive impact through non-financial metrics and clear targets.

With the growing demand for transparency and accountability, it is important for digital economy companies to design responsible products, services and operations.

As the need for sustainable solutions for social well-being, environmental protection, and long-term resilience becomes more pressing, so too does the narrative of investing for impact. Therefore, responsible, enabling, facilitating, and transformative digital technologies can simultaneously create value and advance sustainability.

According to the Tech For Good Institute's framework, digital economy companies can accelerate sustainable development in Southeast Asia by designing responsible and sustainability-oriented products, services and operations.

  • Promoting Responsible Technology

Climate change is becoming an increasingly serious threat to Southeast Asia, prompting businesses to transition to a low-carbon future. Responsible digital economy companies have prioritized exploring innovative solutions to identify and address the negative impacts of their business.

Taking a step forward, these companies are conducting a thorough assessment of their systems, processes, products, and services to reduce their carbon footprint across the value chain.

  • Digital Technology: Smart Solutions to Combat Climate Change

Digital technologies have opened up new opportunities to reduce greenhouse gas emissions and support informed decision making. Through the use of real-time data collection and control, these technologies provide an edge in meeting the challenges of climate change.

All of this is inextricably linked to advanced enabling technologies such as cloud and 5G, as well as data analytics, which form the basis for developing solutions. High-emitting sectors, particularly in the energy sector, are already leveraging these advances to address environmental challenges.

Equipped with sensors and satellites, and with the support of efficient data collection, processing, and modeling, there have been rapid advances in weather monitoring and forecasting. Now, society can proactively respond to severe weather events, helping to mitigate their impact and protect our environment. Digital technologies offer intelligent solutions to the increasingly urgent challenge of climate change.

  • Enabling Technology for Efficiency Transformation

Digital technologies optimize efficiency by streamlining processes, saving time, increasing convenience, and reducing costs. One example is sustainability reporting, which uses digital tools to assess a company's environmental impact, climate progress, and sustainability commitments.

The Center for Governance and Sustainability (CSG) study shows that the climate disclosure rate in SEA-6 is 46%, while the nature disclosure rate in Asia-Pacific is 31%.

Technologies such as remote sensing, drones and satellite imagery provide real-time information on climate and energy conditions. Automated controls help optimize energy consumption, and cloud-based solutions facilitate data collection and analysis.

Environmental impact data and reports are also available to stakeholders in real time. Through websites, digital platforms, and social media, companies can communicate openly about climate reports, goals, and progress, promoting greater transparency.

  • Transformative Technology Solutions to Overcome Challenges

Transformative technologies offer a new approach to the dual challenge of addressing the climate change impacts of developed country emissions and promoting sustainable development for the rapidly growing populations and economies of Southeast Asia.

Ambitious development plans require an increase in energy and energy-related emissions in the region, which are expected to double by 2030. To address this, the transition from fossil fuels to renewable energy is critical.

Solar panels, wind turbines, and energy storage systems are becoming essential solutions for organizations to generate and use clean energy sources. In addition, smart grid systems and energy management platforms enable the integration of renewable energy sources into the existing energy infrastructure to ensure a reliable and sustainable energy supply.

The importance of digital transformation and sustainability in Southeast Asia presents opportunities for digital economy companies. The SEA-6 market has a young, ambitious and mobile population, which opens up the potential for innovation to solve problems and drive solution adoption.

Technology companies play a key role in addressing these challenges by developing and delivering responsible, enabling and transformative technologies in the markets they serve.

Supporting the region's sustainable development priorities provides opportunities for technology companies to find markets that meet national needs and priorities and create sustainable value for society. This in turn creates opportunities for growth and development for all stakeholders.

Source: World Economic Forum

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