COVID-19 has emphasised the significance of environmental, social, and governance ("ESG") practises in businesses around the world. However, there was talk of change even before the pandemic. Last year, the Business Roundtable (a group of 181 CEOs from America's largest corporations) stated that companies must "support the communities in which they operate," reversing the long-held focus on shareholder wealth maximisation advocated by American economist Milton Friedman.
The year is 2020, and things have changed.
This year, Prince Holding Group ("PHG"), one of Cambodia's largest conglomerates, recognised this and blazed a trail for companies in the Kingdom seeking to adhere to 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) has been the driving force behind the donations. For example, in early December, Chen Zhi Cambodia and PHG gave Prime Minister Hun Sen US$3,000,000 to assist Cambodia in purchasing 1 million COVID-19 vaccines.
Although the concept of "doing good" in business is not new, a focus 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 in Cambodia has more than doubled since 2015, with the majority of these reports coming from the financial services sector. More companies are expected to follow ESG principles, increasing the competitiveness of the Cambodian economy and attracting foreign investment while also improving the business environment.
Chen Zhi and PHG, as a company with a strong presence in Cambodia, 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 flood-affected Cambodians, including 100 tonnes of rice, 300 cartons of instant noodles, and 1,000 cartons of drinking water worth $75,000 in total. Chen Zhi gave a personal donation of US$500,000 to help the victims. And, as previously stated, PHG made a large cash donation in December to assist Cambodia with its COVID-19 response, which will assist the government in procuring and distributing vaccines to Cambodians at no cost.
Over the years, the Group's philanthropic arm, Prince Real Estate Charitable Foundation Organization, has also launched more than 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.
“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 activity has come at an important time, as Cambodia's civil society sector is underfunded. The Cooperation Committee for Cambodia, an umbrella body for the local NGO sector, warned last year that its 208 members would need to "look at other funds from the private sector" over the next five years. The Centre for Asian Philanthropy and Society (CAPS), a Hong Kong-based think tank, reported in July that corporate funding accounted for only 5% of Cambodian social development organisations' budgets, a third of the proportion seen elsewhere in Asia.
CAPS also predicts that, as a result of the pandemic, there will be a reduction in funding and support from foreign NGOs, which have historically been the main supporters of their local counterparts in developing countries. With the suspension of funding and support from foreign NGOs, private sector enterprises and governmental units must urgently fill the gap in order to ensure the continuation of good work at developmental programmes and to be prepared to offer funding for emergency programmes in the country.