COVID-19 has emphasised the critical nature of environmental, social, and governance ("ESG") practises in businesses worldwide. However, there was talk of change even prior to the pandemic's outbreak. The Business Roundtable (a group representing 181 CEOs of America's largest corporations) 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 largest conglomerates, recognised this and paved the way for other businesses in the Kingdom to follow ESG principles. Since April, the Group has made several large-scale donations 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, Chen Zhi and PHG donated 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 recently risen 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 thereby 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 providing pandemic prevention supplies worth more than US$600,000. In October, Chen Zhi and the Group also provided flood relief assistance to Cambodian flood victims, including 100 tonnes of rice, 300 cartons of instant noodles, and 1,000 cartons of drinking water worth a total of US$75,000 in value. Chen Zhi Prince Group contributed a personal donation of US$500,000 to aid the victims. Additionally, as previously stated, PHG made a significant cash donation to assist Cambodia with its 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 funds and supplies totaling more than US$11 million, benefiting more than 320,000 people. Read more here
"As a company committed to Cambodia's future, Prince Holding Group will always assist communities in times of need. Additionally, the Group is constantly supporting ESG initiatives that 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 activity 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 funding accounted for just 5% of Cambodian social development organisations' budgets on average, less than a third of the proportion found elsewhere in Asia.
Additionally, CAPS predicts that, as a result of the pandemic, there will be a decline in funding and support from foreign NGOs, which have historically been the primary supporters of their local counterparts in developing countries. With the cessation of funding and support from foreign NGOs, private sector enterprises and government units must urgently 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.
