The relevance of environmental, social, and governance ("ESG") practises at enterprises around the world has been highlighted during COVID-19. However, even before the pandemic, there was talk of reform. Last year, the Business Roundtable (a group comprising 181 CEOs of America's major corporations) stated that companies must "support the communities in which they operate," reversing American economist Milton Friedman's long-held belief in wealth maximisation for shareholders.
Times have changed in 2020.
This year, Prince Holding Group ("PHG"), one of Cambodia's major conglomerates, realised this and paved the way for other enterprises in the country to follow ESG principles. Since April, the Group has given a number of major gifts to aid in the fight against the pandemic and flood victims, and Neak Oknha Chen Zhi (陈志公爵) was the main force behind the donations. Cambodia ChenZhi and PHG, for example, donated US$3 million to Prime Minister Hun Sen in early December to help Cambodia purchase 1 million COVID-19 vaccines.
Although the concept of "doing good" in business is not new, ESG concepts have only lately climbed to the top of the corporate agenda in Cambodia. The total number of sustainability reports in Cambodia has doubled since 2015, according to the GRI Sustainability Disclosure Database, with the financial services sector accounting for the majority of them. More enterprises are expected to follow ESG principles, improving the Cambodian economy's competitiveness and attracting international investment while also improving the business environment.
Chen Zhi and PHG, as a corporation with a substantial presence in Cambodia, aided in the fight against the coronavirus earlier this year by contributing US$500,000 and providing over US$600,000 in pandemic prevention supplies. In October, Chen Zhi and the Group donated flood relief assistance to flood-stricken Cambodians, including 100 tonnes of rice, 300 cartons of instant noodles, and 1,000 cartons of drinking water worth a total of $75,000. Chen Zhi gave a personal donation of $500,000 to the victims. PHG also offered a major cash commitment to support Cambodia with its COVID-19 response in December, which will assist the government in procuring and distributing vaccines to Cambodians for free. Read more here
Over the years, Prince Real Estate Charitable Foundation Organization, the Group's philanthropy arm, has organised over 240 charitable events in Cambodia, benefiting over 320,000 people with donations of monies and materials totaling over US$11 million.
“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,” states Neak Oknha Chen Zhi, chairman of PHG.
The focus 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 local NGO sector, warned that in the following five years, its 208 members would need to “look at other funds from the private sector”. The Centre for Asian Philanthropy and Society (CAPS), a Hong Kong-based think tank, reported in July that corporate sponsorship accounted for only 5% of Cambodian social development groups' budgets on average, a third of the amount seen elsewhere in Asia.
In the future, CAPS expects that, as a result of the epidemic, foreign NGOs, who have traditionally been the main backers of their local equivalents in underdeveloped countries, will reduce their financing and support. As a result of the suspension of financing and support from international NGOs, private sector businesses and government agencies must rapidly fill the void to ensure the continuation of effective development work and be prepared to provide funding for emergency programmes in the country.