SCRS Conference Day 2 Session 11
ESG & Insurance: Opportunities & Impact on the Supply Chain
By Mr. Abdul Halim Jantan, CEO Sterling Group
“The greatest danger in times of turbulence is not the turbulence, it is to act with yesterday’s logic” – Peter Drucker
Mr. Abdul Halim Jantan, CEO of Sterling Group, emphasized, “We have got to withdraw ourselves from having to look at what’s in the past, what’s common, and what’s norm, into the future.” The reality today is challenged with supply chain breakdowns, climate change, war, energy crisis, and food insecurity, all costing us millions. Supply chain methodologies need to be more targeted, with the view of providing a lot more for the future. To avoid being shortsighted, Halim presented three key components for companies to review upon – taking stock for baselining, finding centre for corporate purpose, and investing in the future.
The concept of Environmental, Social, and Governance (ESG) has gained significant attention worldwide, with discussions and actions focused on driving value from it. Companies need to look beyond popular trends and carefully evaluate the implications and potential benefits of embracing new concepts like reverse engineering. Halim shared the two main objectives of ESG are to embrace shared values for humanity and to reject the old status quo in order to embrace a new one that will drive conservation, education and equality.
Supply Chain ESG Risks & Value Creation
Supply chains are now facing more ESG risks than before – environmental pollution, natural resources scarcity, workforce health & safety incidents, labour disputes, geopolitical instability and corruption. To address these challenges, we need to embrace circular economy principles. The concern is that businesses only control 20% of the situation, whereas 80% of the responsibilities lie with supply chain partners and affiliates. Halim continued to provide five supply chain ESG management and compliance tips – start measuring, implement a traceability system, prioritize conscious collaboration, create a ‘virtuous cycle’ and beware of ‘virtue signaling’.
It is crucial to align business actions with the principles of ESG, especially considering its current prominence in discussions. Following, businesses should review their objectives by examining actions through the lens of intentionality as often the impacts are created unintentionally. Additionally, organizations need to reflect on their business purpose and have a meaningful purpose of existence. By incorporating ESG principles, organizations drive up efficiency, improve business relationships and profitability.
With ESG’s focus on transparency and visibility, it enhances the credibility of the organization and strengthens its commitment to responsible practices. Embracing ESG practices also helps attract talented individuals with a moral compass and a belief in the future of humanity. This, in turn, improves business reputation and customer relationships. Transparency and traceability are essential for building trust for any long-lasting business and supply chain.
Investing in the Future: Innovation & ESG Trends
Robotic processes, machine learning, Artificial Intelligence (AI) and technologies have streamlined operations by removing human elements, difficulties, and failures, and at the same time may support ESG efforts. Halim explained the benefits of using blockchain, Robotic Process Automation (RPA) and Internet of Things (IoT) for organizations to improve traceability, transparency and their ability to make informed decisions based on accurate data.
Investing in the right platforms and knowing the objectives can effectively unlock the potential of these technological advancements. Embracing and aligning these initiatives with corporate purpose can ensure long-term success in a changing landscape. Halim emphasized the focus should be on individual growth and embracing change, but in a gradual and measured way. Rather than taking on too much at once, starting small and avoiding being overly aggressive is advisable. By making incremental changes, the way we work can transform beyond recognition. It is important to have a purpose that motivates change rather than solely chasing profits. Halim also emphasized the need to prioritize the long-term benefits for future generations, even if it means sacrificing some short-term profits.
Navigating the regulatory problems and conforming to ESG requirements is crucial. Governments, banks, and law disparities drive us toward an ESG-focused world. Compliance with regulatory requirements is necessary for organizations involved in global trade to stay relevant and avoid being left out. Halim emphasized the importance of considering the shifting landscape of goodwill and the global movement towards ESG principles. The focus on ESG not only promotes sustainability and a circular economy but also offers advantages in terms of visibility and profitability. Organizations must recognize and embrace this global shift. Failing to do so may result in being left behind, with negative consequences for the organization and its supply chain. Taking the necessary steps to align with ESG principles and international ESG standards is essential, as it starts with the organization and has a ripple effect throughout the supply chain.
To learn more about TAPA Standards, please visit TAPA APAC website at www.tapa-apac.org or email to info@tapa-apac.org
About the Speaker
Mr. Abdul Halim Jantan CEO, Sterling Group
Mr. Abdul Halim Jantan is the Director and Chief Executive Officer of Sterling Insurance Brokers, a company he started in 2000. Before embarking on his broking journey, he spent 14 years at American Malaysian Insurance Berhad (AMI), his last position as the Chief Executive Officer. At Sterling, he had developed and pioneered the insurance for power plants and significant industrialized risks, particularly in mega construction projects.
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