CEOs say sustainability needs ‘the right rules’

Government regulations often don’t take into account local business realities, forum told

The right government regulations and participation from the general public are crucial factors in driving Thailand towards sustainable development, say top business executives.

They aired their views on Friday during two panel discussions — Sustainable Hospitality and Mobility, and the Power of Collaboration Leading to a Sustainable Future — held at Sustainability Expo 2024 (SX2024) at the Queen Sirikit National Convention Center in Bangkok.

Tony Fernandes, a co-founder of AirAsia and CEO of its holding company Capital A, said it is important that the government introduce suitable regulations without rushing the process.

He expressed concerns over the government’s consultation with experts from the West, who may not understand the local context in other parts of the world, particularly Southeast Asia.

The dialogues on regulatory frameworks sometimes lack sufficient input from the business sectors regarding how they operate and their needs.

Mr Fernandes cited the mandate for sustainable aviation fuel (SAF) as an example.

He said SAF has been mandated by every Asean government to reduce emissions from the aviation industry.

However, he said the cost of SAF biofuel is 20–30% higher than conventional jet fuel. Certain regulations accompanying the SAF mandate, such as the ban on palm oil in the manufacturing of biofuel, may not be practical for certain regions, especially Asean.

Mr Fernandes suggested that the government should explore other approaches to sustainability in the aviation industry.

His suggestions included improving air traffic management to reduce the number of aircraft waiting to land at airports, exploring new aviation technologies and renewable energy sources, and collecting carbon fees as part of environmental projects. He believes the latter would help reduce more carbon emissions than the SAF.

The Malaysian CEO also added that, as each Asean country has different regulations, it is difficult for business sectors to follow rules that differ from country to country.

Therefore, he suggested that Asean governments work together to create a unified policy, which would eliminate confusion within the business sectors.

Educating people on sustainability and raising their awareness on climate change is necessary, Mr Fernandes said.

The public must understand why we need certain regulations, such as carbon credits and carbon fees, to save the planet.

This effort to increase understanding must also involve the business sector, as they are likely to be the most affected by the policies and the ones who can make a difference, he said.

“It is very popular to say ‘sustainable’ without considering how it is going to affect the economy and the common man,” he said.

The government should not rush into regulations that could negatively affect the environment and people in the long run, he said.

He added that the government should refocus on policies that impact carbon reduction, rather than penalising consumers.

Panote Sirivadhanabhakdi, the CEO of Frasers Property Group, said the regulatory frameworks on sustainability for the business sector should support them in achieving their sustainability goals.

To reach these goals, collaboration among business operators is needed, he said.

However, as he pointed out, some regulatory frameworks do not allow businesses to work together to their full potential, as they may conflict with shareholders’ demands.

“The regulatory framework sometimes sets ambitious outcomes but does not allow us, as business operators, to achieve these goals together,” he said.

He therefore urged the government to create the fundamentals that would help business operators work together to achieve their goals.