Episode Transcript
[00:00:07] Speaker A: Hi and welcome to Activating Sustainability, the Anthesis Podcast. I'm Yasmin Lee, your host for today. Recently, investors, private equity leaders and sustainability professionals came together in Singapore for the Responsible Investment Forum Asia. That's a gathering where long term strategies met practical solutions across value creation, regulatory changes and shifting market dynamics.
Before the forum, Entheses hosted an exclusive leadership lunch to set the stage for these conversations. It was an opportunity to explore global ESG trends, portfolio challenges and the critical intersection of climate, capital and innovation.
In this episode, we're looking back at what mattered most.
Joining me today are Jonathan Friedman, Director and ESG Advisor in London, Trigo Tiensnacht, Principal Consultant from Melbourne, and Clare Soon, Director here in Singapore. Welcome all.
Together, we'll unpack how sustainability influenced portfolio value, how cross border reporting expectations played out, and the market signals shaping strategies across Asia. We'll also share key insights from the Leadership Lunch that help frame these discussions. Let's dive in.
So let's start in the room. What stood out and what's signal versus noise? Claire, please play in the room. What themes dominated conversations in Singapore and why do they matter for investors today?
[00:01:34] Speaker B: Thanks, Yasmin. So I do think that one of the strongest themes at the conference was really about the need to integrate sustainability into decision making as a lever for value creation. So this is especially relevant in the Asia Pacific region where the operating environment tends to be more fragmented and frankly speaking, less driven by compliance and regulation than in the EU or the UK for example. And what that means for all of us working in sustainability here is that we need to be able to demonstrate the long term value of investing in sustainability. Our investors in senior management are increasingly asking, so how exactly does investing in sustainability and sustainable business drive performance, resilience and critically, long term returns? I do think that this was a theme that just constantly emerged throughout the various discussions that we had around the conference.
[00:02:22] Speaker A: Great. Sounds like very insightful conversations. And now to you, Jonathan. How would you describe the overall regulatory landscape for investors and portfolio companies and what does it mean for their long term strategies?
[00:02:39] Speaker C: Thank you, Yassin. And I would say in Asia, most productly firms were still operating in a very lightly regulated space.
We are seeing reporting standards coming in for large and public listed companies in Singapore, Malaysia, India, and these give a view of what might be coming down later for smaller companies where expectations will be. But generally speaking, we're seeing a much less onerous kind of landscape than we have over in Europe. And so I think this allows folks in Asia to really focus on what matters their companies, what is material and often choosing a few topics for each portfolio company and really focusing on those and approaching things that way.
[00:03:23] Speaker A: Very interesting. Thank you, Jonathan. And now moving to the portfolio operations. Gregor, what problems kept coming up? Data resourcing or decarbonization and where's momentum?
[00:03:35] Speaker D: All right, so the one topic that was quite a, quite a challenge everywhere and all around and throughout the whole one and a half days was data. Data availability, quality, accuracy were all mentioned in all the conversations that we have had and all the panel discussions. It came up pretty much everywhere.
And I think while data is quite critical and the quite critical element in sustainability, portfolio companies should equally also put a focus on capabilities and skills.
We see in Australia now that climate disclosures, for example, are mandatory, that those capabilities and resourcing are quite critical in putting out solid and founded disclosures. So it is important to have a look at both.
[00:04:21] Speaker A: And Gregor, could you name one lever teams can pull in less than 12 months?
[00:04:26] Speaker D: When it comes to data, I would say to develop a data quality improvement plan and really not only focus on internal data, but also what's available externally through sources, but also through the network they have industry forums like the RIF are really good for that. So attend those ones which also then acts as an upskilling event as well.
[00:04:49] Speaker A: Agreed. I really liked the conference and enjoyed my time there. Let's move now from headlines to the mechanics of value creation.
How do we turn reporting into action on the P and L? Jonathan, how are investors and companies turning regulatory compliance into an opportunity for stronger performance and resilience?
[00:05:09] Speaker C: I would say, really, when you're faced with the compliance requirement, there are two options. There's one, you can say, look, we have to do this. We're going to do the minimum possible and get this data as fast as we can. Or there's the approach which we're seeing, really a lot of folks take is saying we have to do this, let's at least try and extract value from it. And I think when it comes to things like, for instance, sustainability reporting requirements, it has been extremely helpful for sustainability leads and other folks to bring stakeholders together, form a common language around sustainability internally, and also move away from maybe something happening on an ad hoc basis in the portfolio where not everyone knows what, what's going on, to having a more centralized strategy. And that can create both efficiencies also opportunities when, you know, say, fundraising, engaging with LPS and other things. So that's one example of where we're seeing met investment.
[00:06:09] Speaker A: Great. And what practical steps did you see firms take to link sustainability efforts with business outcomes.
[00:06:16] Speaker C: I would say really on that front, the practical thing is trying to do more with less in the sense of you can get caught up with lots of different KPIs, lots of different targets, and that's what you're kind of encouraged in some respects by all the different reporting frameworks out there and initiatives. But we're seeing the folks that have the most success really drill down on a few material topics and really find ways to check back from those and really achieve performance performance on those. And that's where we're seeing success happening.
[00:06:52] Speaker A: Indeed. Sometimes less is more. Claire, could you please tell us where do you see the clearest ROI from operational decarbonization in Southeast Asia?
[00:07:03] Speaker B: I think absolutely the clearest ROI would be in terms of future proofing business value. So it's not just thinking about in terms of business continuity, but also in terms of ensuring and uplifting demand from buyers. We're seeing a strong push from end customers to say your Fortune 5000 who are really embedded in the global supply chain, who expect their suppliers now to be committed to net zero. On the private equity side, that pressure is coming from LPs and GPs who are setting expectations for their portfolio companies to demonstrate credible decarbonization pathways and assess their climate risk profiles. Sometimes we're seeing even before the point of investment.
So when it comes to Asia, even modest steps like improving energy efficiency or switching to renewables can deliver measurable financial and reputational returns. It's really not just about meeting a target, it's more about long term competitiveness and operational decarbonisation helps companies stay competitive, retain your biggest contracts and attract capital.
[00:08:02] Speaker A: Right, and now to Gregor. I think our listeners would really appreciate some pragmatic insights. Could you outline a three step path for a portfolio company to improve data resource smartly and cut the mission.
[00:08:17] Speaker D: The three words that come to mind when, when we talk about a path to decarbonization is all reliant on materiality, influence and roi. So when we look at emissions, for example, you always look at the most material emissions first and foremost. So that's, that's your number one step. Don't look at and anything that comes second or third just really go with, with what's right in front of you and what you can influence. So that's the second step would be looking at where you can have an influence over what sort of emission sources. And then as a third one, you analyze the ROI of any investment decision. So whether that's an investment in A data improvement in new resources or those initiatives that actually do cut emissions.
[00:08:59] Speaker A: Dix grabber. Let's move now to cross border regulation and reporting. We can see that portfolios juggle eu, uk, Singapore and Australian expectations. Let's keep this one practical. Claire, could you please compare Singapore's expectations with EU and UK trends? What do you think should APEC managers prioritize in 2025?
[00:09:21] Speaker B: That's a great question. So sitting here in the region, I think it's quite clear that say in Singapore and looking across the broader APEC region, it's much more of an incentive driven approach and much more collabor cooperative approach towards sustainability.
So in Singapore for example, it's really been positioning itself as an APEC regional hub for green finance, innovative financing models, carbon markets and services.
So again, this is very much incentive driven, emphasizing long term investment and business opportunities.
In contrast, I think for the EU and the UK is very much more a regulatory driven conversation with of course mandatory disclosures and quite strict taxonomies.
So maybe for 2025 I would suggest that APEC managers should look to building internal ESG capabilities specifically around establishing processes to establish a data baseline for ESG and sustainability metrics and leveraging technology where possible.
This will help to set a foundation from which sustainability progress can be measured against international standards, whether it's at the business level or portfolio level. And this will help attract global capital as well as build trust of stakeholders.
[00:10:29] Speaker A: And Jonathan, from what you observed, how are firms approaching cross border reporting challenges and what does that tell us about their priorities?
[00:10:38] Speaker C: Look, Yasmin, cross border reporting is not fun. It can never be fun. I don't have a way to tell you it's going to become easy, but you can make it less painful if you have good ESG data management.
And what we're seeing is increasing table stakes is to move out of Excel and into a, you know, purpose built, user friendly ESG data collection and reporting solution. And in Thesis we have our own solution which is called Miro. Other folks have other offerings, but the key thing here is to be allowed to input data once and report many times and across those kind of different reporting requirements and also see what the actual nuances are, what you'd have to add on to say, comply with ASRs reporting regulations, edci, voluntary standards and so forth. So this is what we're seeing increasingly as a must have in this reporting environment.
[00:11:32] Speaker A: That was spot on, Jonathan. I can only agree. My day to day work, I experience the same when it comes to cross border reporting. Were there any Themes or practices that stood out as most helpful for managing complexity across regions.
[00:11:47] Speaker C: That's a great question. I think it's having those good internal processes, understanding what's coming down and being prepared for. What we're seeing is challenge for folks where things are being left to the kind of last minute and you have these recording deadlines and you're scrambling and it's harder than you think sometimes to get all that data in place.
Especially as in the future you're going to have assurance requirements for a lot of these recording standards. The earlier you get those robust data processes in, the stronger you're going to be placed.
[00:12:23] Speaker B: Great.
[00:12:24] Speaker A: And before the forum, Enthes hosted a leadership lunch to spark dialogue on climate, capital and innovation. Let's reflect on what resonated and how it influenced the conference. Starting with you Kregor. Which portfolio challenges discussed at the launch carried through to RIF Asia sessions?
[00:12:45] Speaker D: To be fair, there was not really any any particular challenge. But what was so fascinating for me coming from Australia was everybody in Australia is just talking climate at the moment because it is mandatory now coming to Asia, the focus and the clear indication was that the climate is currently not top priority.
So it is all about social impact, human rights, modern slavery and so on. And the challenge there I think is meeting LPs expectations.
Whilst climate for example, might be one of those requested by the lp, but then this might not be a material topic within the portfolio company or the GP itself.
So that's kind of the challenge of meeting LP's expectations, but also looking at your own portfolio company's materiality and material topics that really have an impact on where they operate in the sector and the country they operate in.
[00:13:43] Speaker A: From your perspective, Claire, how did the lunch set expectations for regional collaboration?
[00:13:50] Speaker B: The client lunch was a highlight for me. I felt that it created a candid space for conversations about shared opportunities and challenges. So for example, conversations around supplier engagement and data quality.
It also reinforced anthesis role as a connector and reminded us that we're not just advisors, we can also be a platform to help convene like minded investment and sustainability practitioners so they too can collaborate our network and really move the whole conversation forward.
[00:14:18] Speaker A: Now to you, Jonathan. What global ESG trends did you highlight at the launch and how did they frame conversations during the forward?
[00:14:27] Speaker C: Yeah, absolutely. I think what we talked a lot about was some of the challenges actually that you're facing the commercial side of private equity, which is it's been a tough exit environment and that's also the case in Asia with often even longer holding periods for portfolio companies in Asia that we see in Europe.
And so one of the things that we've been very excited about and thesis in the uptake from our clients on has been some of our work around what we call equity narratives, which is helping to introduce storytelling into how you bring together the why a company's offer is compelling, what its purpose is, why it has a right to, you know, win market share in the future and attract and retain the top talent. That was one topic that I enjoyed talking about during the client launch.
[00:15:16] Speaker A: Very interesting. Thank you. It is an event to bring great people together and sustainability and I hope more of that is soon to come. Now to land this, let's get one concrete step from each of you. Very short 30 seconds each one action our listeners can take for this quarter.
Maybe we start with you Gregor.
Name one operational lever with fast payback. Huge prioritize first the energy efficiency, procurement or process.
[00:15:48] Speaker D: I think one of the easiest one to tackle is always efficiency, improving efficiency and thus also reducing operating costs. So go with energy efficiency.
[00:15:59] Speaker A: Jonathan, what's one practical step companies can take to make their sustainability data more useful for decision making?
[00:16:07] Speaker C: Well, I would still say focus on fewer KPIs. This isn't exactly the answer to your question, but I think that's what cannot for me and conversations.
[00:16:16] Speaker A: Claire, please share one relationship or policy step APEC teams should initiate now.
[00:16:22] Speaker B: I would say that stakeholder engagement is really critical and so one of the most strategic steps APAC teams can take right now is to deepen engagement with their LPs.
Several LPs were present at RAF and the impression I got was that many LPs are not just asking for data, they're taking an increasingly active role in shaping the sustainability agenda through their capital allocation decisions. By proactively engaging with LPs, managers can better understand and anticipate evolving expectations, co develop credible transition plans, and even unlock market access and new networks as well as partnership opportunities.
This kind of dialogue also helps to build trust and transparency, which is really critical in a region where ESG maturity varies widely and hopefully makes those LP questioners easier to handle.
[00:17:10] Speaker A: Great. And maybe just one last one. One extra what's one myth you'd debunk about ESG and apac?
[00:17:19] Speaker D: It's not as scary as it sounds.
[00:17:23] Speaker A: That's a good one.
[00:17:24] Speaker C: I will say. The myth is that people don't care about ESG or sustainability in apac, that came out very clearly at risk. That's not true, however, it's a more open conversation. People are really free to do what they like on sustainability, and there's just less of that regulatory folks that you have in Europe and I think less of the politicization that you see over North America. So there's an open air for this and a lot of people are interested in doing really fascinating things on it. And yeah, I think there's an exciting future for sustainability investing in Asia.
[00:17:56] Speaker A: Today we reflected on how reporting informed value creation, why cross border coherence mattered, and how APAC market dynamics shaped decisions.
Insights from the Leadership Lunch helped set the tone for these discussions. Thank you so much to Jonathan, Gregor and Claire for the insights, and thank you all for listening. As always, we love to hear from you. Send us your feedback through our website and thesisgroup.com podcasts where you can also find resources and past episodes. Thanks again and take care.
