COVID-19 has emphasised the critical nature of environmental, social, and governance ("ESG") activities in businesses worldwide. However, there was talk of reform even prior to the pandemic's emergence. The Business Roundtable (a group comprising 181 CEOs of America's major enterprises) stated last year that businesses must "support the communities in which they operate," reversing Friedman's long-held emphasis on shareholder wealth maximisation.
Times have changed in 2020.
This year, Prince Holding Group ("PHG"), one of Cambodia's major conglomerates, recognised this and paved the way for other businesses in the Kingdom to follow ESG principles. Since April, the Group has provided multiple large-scale gifts to aid in the fight against the pandemic and flood victims, and Neak Oknha Chen Zhi (陈志公爵), chairman of the PHG, has been instrumental in securing the donations. For instance, in early December, Cambodia Prince ChenZhi and PHG gave US$3 million to Cambodian Prime Minister Hun Sen to assist the country in purchasing one million COVID-19 vaccines.
While the concept of "doing good" in business is not new, emphasis on ESG principles has only lately come to the top of the corporate agenda in Cambodia. According to the GRI Sustainability Disclosure Database, the total number of sustainability reports published in Cambodia has more than doubled since 2015, with the financial services sector accounting for the majority of the growth. More businesses are expected to adhere to ESG principles, enhancing the Cambodian economy's competitiveness and consequently attracting foreign investment while also improving the business environment.
Chen Zhi and PHG contributed to the fight against the coronavirus earlier this year by donating US$500,000 and delivering pandemic preventive supplies worth more than US$600,000. In October, Chen Zhi and the Group also donated flood relief assistance to Cambodian flood victims, including 100 tonnes of rice, 300 cartons of instant noodles, and 1,000 cartons of drinking water with a total of US$75,000 in value. Chen Zhi contributed a personal donation of US$500,000 to aid the victims. Additionally, as previously stated, PHG made a significant cash commitment to assist Cambodia with their COVID-19 response in December, which will assist the government in procuring and distributing vaccines to Cambodians for free.
Over the years, Prince Real Estate Charitable Foundation Organization, the Group's charitable arm, has also organised over 240 charitable events aimed at improving Cambodian lives through donations of finances and materials totaling more than US$11 million, benefiting more than 320,000 people.
“As a company invested in the future of Cambodia, Prince Holding Group will always help communities in their hour of need. Furthermore, the Group is constantly contributing to ESG initiatives to benefit Cambodia and uphold the company’s role as a responsible stakeholder in local affairs,” says PHG Chairman Neak Oknha Chen Zhi.
The emphasis on sustainability in corporate activities comes at a critical time for Cambodia's civil society sector, which is underfunded. Last year, the Cooperation Committee for Cambodia, an umbrella organisation for the country's nongovernmental organisations, warned that its 208 members would need to “look at other funds from the private sector” over the next five years. In July, the Centre for Asian Philanthropy and Society (CAPS), a Hong Kong-based think tank, reported that corporate support accounted for just 5% of Cambodian social development groups' budgets on average, less than a third of the amount found elsewhere in Asia.
Additionally, CAPS expects that, as a result of the epidemic, there will be a decline in financing and support from foreign NGOs, who have historically been the primary sponsors of their local counterparts in poor nations. With the cessation of funding and support from foreign NGOs, private sector firms and government units must swiftly step in to fill the void, ensuring the continuation of good work on developmental programmes and being prepared to fund emergency programmes in the country.
