By: Mr. Ahmed Moustafa
Egyptian Economist and International Youth Coach
Director of Asia Center for Studies and Translation
Asia Center for Studies and Translation – Directed by Ahmed Moustafa (wordpress.com)
Master Holder in Political Economy 2021, HSE Moscow
Member of CODESRIA, Dakar, Senegal and Group of Strategic Vision
Russia and Islamic World, Journalists Against Extremism
Cellphone: +201009229411
Email: solimon2244@yahoo.com
ahmedmoustafa830@gmail.com
The debate over ESG (Environmental, Social, and Governance) standards is one that is potentially found in virtually all countries of the world with varying degrees of intensity. The standards were developed to address ethical, environmental, and financial impact issues which in many cases are shaped by different cultures and beliefs. This is why the discussion of ESG standards is ongoing and is likely to remain so for some time to come.
One of the main points of contention for ESG standards is that each country has its own individual set of values and regulations, making a universal standard difficult to achieve. The effects of ESG standards may often be difficult to quantify, making them largely subjective. Supposing an ESG standard to be implemented, the methods of evaluating whether or not companies meet these standards also vary.
For now, the West appears to be at the forefront when it comes to ESG standards. This is because it has the largest markets and potential investors and also because the region has some of the most stringent laws when it comes to corporate responsibility. Countries like the US have the Dodd-Frank Act, the SEC’s conflict of interest rules, and the Sarbanes-Oxley (SOX) legislation to name a few. Each of these regulations has encouraged companies to adhere to higher ESG standards.
Moreover, the governance and financial impact of ESG standards have been more prevalent in the West. Companies in the US, for example, are required to report their sustainability results to the Securities and Exchange Commission (SEC) and adhere to various regulations regarding ESG performance. This in itself has shaped companies’ decision-making and encouraged them to adopt stronger ESG standards.
Ultimately, the debate over ESG standards is an ongoing one, and while the West is currently leading the charge in terms of companies adhering to higher standards, it remains to be seen how long this will last and which other countries will eventually join suit.
Can SCO countries achieve better ESG levels properly, or not?
The Shanghai Cooperation Organization (SCO) is a group of countries in Central Asia, China, and Russia that have joined together in an effort to boost economic, political, and security ties. With the introduction of the United Nations’ Sustainable Development Goals (SDGs) in 2015, SCO countries have shown great interest in Environmental, Social, and Governance (ESG) initiatives, particularly as they relate to sustainable development. In this framework, SCO countries have identified the need for improved environmental, social, and governance standards in their respective countries.
In light of this, SCO countries have taken several initiatives in order to promote and strengthen the development of ESG standards in the region. For example, the SCO countries have signed multiple agreements to promote cooperation and the exchange of information and experience on ESG-related issues. In addition, the SCO Member States have taken steps to launch programs and initiatives, such as the SCO Sustainable Development Fund and the Shanghai Cooperation Organization Center for Energy and Sustainable Development, to foster a better understanding and knowledge of the best practices for sustainable development.
To achieve better ESG levels in the region, SCO countries must, however, tackle several challenges. Foremost among these is the lack of accountability across countries, as the lack of complementarity and coordination between existing frameworks and policies can limit the impact and outcomes. This can be seen in the case of climate change, for instance, in which countries have yet to agree on any kind of binding agreement that would enable them to collectively tackle the issue. Also, SCO countries have yet to come to a full agreement concerning key ESG dimensions such as public disclosure on waste management and safety, e.g., to ensure that industrial companies in the region are adhering to international standards on safety in the workplace.
Though existing challenges may make substantial progress difficult, with concerted efforts and an uncompromising commitment to achieving better ESG levels, SCO countries will be well-positioned in the coming decades to make significant strides toward creating a more sustainable future.
Although the countries of the Shanghai Cooperation Organisation (SCO) are following some international ESG standards, they are also beginning to consider the possibility of having their own regional standards. This makes perfect sense as the SCO countries have different environmental, social, and governance climates than the countries in the West. This can create issues when it comes to the implementation of certain international standards, and some countries may not be prepared to implement them. Developing regional standards will help to address any differences while at the same time providing a meaningful set of ESG standards.
The SCO countries have different economic and social dynamics, and as a result, their ESG standards should take this into account. Any regional standards that are developed should look at the diverse needs of the countries, such as those related to poverty, education, healthcare, and even access to clean water. These needs can vary significantly among the different countries, which is why any ESG standard needs to be tailored to the local context.
Furthermore, it makes sense to have some regional oversight on the standards to ensure they are being adhered to. This would involve creating an entity to monitor and audit the standards, providing guidance and support when necessary. The SCO has the necessary resources and expertise to create a regional regulatory body so that any standards developed adhere to international best practices.
Are SCO countries entitled to obtain compensation from the West to apply ESG codes?
The countries belonging to Shanghai Cooperation Organization (SCO) have experienced and still have an increasing impact from the Western interventions in their economic affairs, as well as from the pre-existing socio-economic inequalities. Those nations are part of an economic group that was founded in 2001. Currently, the SCO countries represent three billion people and include major economies like Russia, China, India, and Kazakhstan, among others. The organization aims to build strong economic and bilateral relationships among its members. It also seeks to address regional challenges such as climate change, poverty, and energy security.
Considering the developing world is still lacking in the implementation of international environmental, social, and governance (ESG) standards, it is only natural that the SCO nations ask for some form of reparation from the West, which has implemented these ESG codes in the global markets. In the last decade, initiatives have been made in order to provide financial help to countries and companies in order to diversify their investments and promote responsible investing practices.
Once the rest of the world understands the importance of applying ESG codes, the SCO countries should receive equal treatment and access to obtain compensation in order to apply these codes. The application of ESG codes would result in an increase in transparency, efficiency, and sustainability of these countries’ economies and encourage investment in a variety of sectors.
Ultimately, the most beneficial outcome for the SCO ex-countries would be to gain equitable access to the international markets and to be part of the global economy as any other developed nation. However, the only way to achieve this is to obtain compensation from the West in order to apply ESG codes. This would ultimately drive the SCO nations toward a more sustainable future.
Can AI and big data in SCO countries develop ESG standards?
There is significant potential for Artificial Intelligence (AI) and Big Data in SCO countries to help develop Environmental, Social, and Governance (ESG) standards that provide meaningful, data-driven insight into long-term sustainability practices. Big data analytics allows organizations to collect, store, and analyze large amounts of data to understand and predict customer needs and business performance. AI, specifically machine learning and deep learning, can be used to accurately assess the impact of practices on ESG ratings.
By looking at performance data, companies can easily identify potential improvement opportunities for ESG ratings and receive in-depth insights into the impact of any proposed changes on overall social and environmental outcomes. AI and big data can also provide real-time feedback to companies on their ESG performance, allowing them to continuously monitor and optimize their practices to meet ESG goals.
Additionally, AI and big data technology can be leveraged to constantly monitor compliance with ESG frameworks within SCO countries and alert organizations of changes that may require adjustments to their existing ESG policies. In sum, AI and big data technologies in SCO countries have great potential to help address the social and environmental sustainability challenges of today, allowing companies to develop and maintain ESG standards that provide meaningful value to stakeholders.
Which AI companies in SCO countries can develop ESG standards there?
AI is becoming increasingly important for implementing ESG (Environmental, Social, and Governance) standards in the SCO (Shanghai Cooperation Organization) countries. There are a number of AI companies that have been established in these countries to meet the needs of their growing economies.
In China, established companies like Alibaba and Baidu have been developing new algorithms and software that can be used to track and measure ESG metrics. In India, AI-based companies such as TCS, Wipro, and Infosys have all been busy developing frameworks and software that can be used to measure and assess ESG-related criteria. In Russia, companies such as Yandex and Sberbank are driving innovation with their own AI technology, which can help companies in the region more effectively assess the sustainability of their operations.
AI companies in Kazakhstan, Uzbekistan, and Kyrgyzstan are also making their mark in this space, with startups such as Cognitive Technologies and DataArt all leveraging their AI capabilities to improve ESG management and reporting processes in these countries. As the SCO countries continue to develop their economies, AI companies in the region should continue to play a central role in helping the countries implement ESG standards.
COP27 Egypt and its Correlation to SCO Countries ESG Standards
The Conference of the Parties 27 (COP27) hosted by Egypt is a unique opportunity for Egypt and the Shanghai Cooperation Organization (SCO) member states to come together to discuss ways to collaboratively advance their respective environmental, social, and governance (ESG) standards. Egypt is already taking substantial measures to reduce its carbon emissions, promote renewable energy and green technologies, and reduce air and water pollution.
Additionally, Egypt has set up the Egypt Climate Change Commission to develop a comprehensive 2030 strategy to reduce greenhouse gas emissions by 30 percent and transition to a climate-resilient economy. Alongside Egypt’s efforts to reduce its environmental footprint, the SCO countries also have ambitious plans to promote renewable energy, carbon emission reductions, resource utilization, and smart city development.
In particular, Russia has invested heavily in renewable energy and energy efficiency research, China has pledged to reduce its energy intensity by 15 percent by 2020, and India has committed to producing at least 40 percent of its electricity from renewable sources by 2030. The participation of the SCO countries in COP27 Egypt provides an unparalleled opportunity to develop global ESG standards, reduce regional disparities in energy and resource use, and establish clear metrics for progress in climate change mitigation.
Consequently, COP27 Egypt provides a unique platform to connect these various countries to prioritize collective ambition for reducing energy intensity, enhancing energy security, and improving energy access. Moreover, the development of multi-lateral partnerships can also be leveraged to ensure that best practices and innovation in ESG standards are shared between countries. Ultimately, successful cooperation between Egypt and the SCO countries during COP27 Egypt will not only foster global ESG standards but also extend to supporting broader objectives of the United Nations Sustainable Development Goals.
Be guided accordingly.
