Sustainability as an umbrella term has become an essential pillar of policymaking in most governments. Yet it does not exist in a vacuum, divorced from financing or politics. In its outlook on sustainability for 2023, the asset management company Schroders lists five trends for investors as the world attempts to move past Covid-19: climate change and political will, natural capital, cost of living and other social stresses, active ownership and impact, and regulation. There is a growing appreciation for the holistic approach, which has become more urgent in the face of lack of progress on climate change. The Schroders report accurately notes that “structural and growing tensions between escalating demand from a larger, wealthier and hungrier global population and the world’s finite resources to support that population” mean not only that climate threats are growing more serious, but that national governments will feel even more tempted to adopt a figurative “every-person-for-themselves” route, which has always stymied global cooperation on climate crisis mitigation.
Furthermore, sustainability goals must also take into account the prioritization of post-Covid economic recovery and geopolitical tensions between the United States and China, especially the US’s attempts to decouple from and economically isolate the Chinese. Asia has never encountered this historical context before – that is, one in which the US and China are locked in an open and fierce contest for dominance, short of a war, across a wide swathe of fields.
This does not bode well for the interconnected way Asian countries have traditionally approached diplomacy and development. For example, the Asia-Pacific Economic Cooperation (APEC) forum leaders at their summit in Bangkok from November 18-19, 2022, envisioned sustainability not as a “separate” goal but one that would be integrated with a network of objectives including what strategist Andrew Hammond, a former UK government adviser and now an associate at LSE IDEAS (the Centre for International Affairs, Policy and Strategy at the London School of Economics and Political Science), called “deeper economic cooperation, an improved environment for trade and investment, and the adoption and sharing of innovation.”
In 2023, Schroders foresees a stronger focus on human capital management, human rights, and diversity and inclusion. Shoring up these aspects of development could be a unique opportunity for the sustainability industry, but it could also be exploited as a geopolitical wedge, as has been a common theme in the past few years.
Summits and meetings as barometers of problems and progress
Two events at the end of 2022 gave us a taste of the trajectory on which we are heading: the United Nations Climate Change Conference, known as COP27, from 6 November to 20 November in Sharm El Sheikh, Egypt, and the meeting between Saudi Arabian Crown Prince Mohammed bin Salman (MBS) and Chinese leader Xi Jinping in Riyadh on December 8. The former has traditionally aimed to unite the world in the common goal of mitigating humanity’s greatest threat. By contrast, the latter could not have been clearer in its geopolitical priorities, with the world’s second-biggest oil producer (after the US) trumpeting its upgraded ties with its largest market, the world’s second-biggest economy.
Geopolitical tensions and maneuvering – countries and blocs locked in fierce competition for influence and power – essentially render the idea of a “global community” as promoted by the UN somewhat quaint and outdated, even as it is widely accepted that the world can only solve its long-term sustainability crises by banding together. As the tools and mechanisms of globalization continue to lose favor in the corridors of power in Beijing and Washington, “geopolitical angst” will define conferences and summits across Asia, with less and less space for the consensus-driven approaches valued by countries in the region.