(PHNOM PENH, Cambodia – 8 December 2020) – COVID-19 has highlighted the importance of environment, social and governance (“ESG”) practices at companies across the world. But there was talk of change even before the outbreak of the pandemic. Last year, the Business Roundtable (a group representing 181 CEOs of America’s largest corporations) outlined that companies must “support the communities in which they operate”, upturning the longstanding focus on wealth maximization for shareholders espoused by American economist Milton Friedman.
In 2020, times have changed.
This year, Prince Holding Group (“PHG”), one of the largest conglomerates in Cambodia, has realized this and blazed a trail for companies in the Kingdom looking to follow ESG principles. Since April, the Group has made several large-scale donations to help in the fight against the pandemic and assist flood victims, and Neak Oknha Chen Zhi (陈志公爵), PHG chairman, has been the driving force behind the donations. For example, in early December, Chen Zhi and PHG donated US$3,000,000 to Prime Minister Hun Sen to help Cambodia purchase 1 million COVID-19 vaccines.
The notion of “doing good” in business is not new, but in Cambodia, focus on ESG principles has only recently risen up the corporate agenda. According to the GRI Sustainability Disclosure Database, the total number of sustainability reports in Cambodia have doubled since 2015, mostly in the financial services sector. More companies are expected to adhere to ESG principles thereby strengthening the competitiveness of the Cambodian economy, which will not only attract foreign investment but also improve the business environment.
As a company with a strong foothold in Cambodia, Chen Zhi and PHG helped in the fight against the coronavirus earlier in the year by donating US$500,000 and by providing pandemic prevention supplies worth over US$600,000. In October, Chen Zhi and the Group also provided flood relief support – this included 100 tons of rice, 300 cartons of instant noodles and 1,000 cartons of drinking water, comprising a total value of US$75,000 – for flood-hit victims in Cambodia. Chen Zhi personally donated US$500,000 to help the victims. And, as mentioned earlier, PHG made a large cash donation in December to help Cambodia with its COVID-19 response, which will help the government procure and distribute vaccines to Cambodians for free.
Over the years, Prince Real Estate Charitable Foundation Organization, the Group’s philanthropic arm, has also launched more than 240 charitable events seeking to improve Cambodian lives through donations of funds and supplies worth over US$11 million, benefitting more than 320,000 people.
“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 activity has come at an important time, as the civil society sector in Cambodia is under supported. Last year, the Cooperation Committee for Cambodia, an umbrella body for the local NGO sector, warned that its 208 members need to “look at other funds from the private sector” in the next five years. In July, the Centre for Asian Philanthropy and Society (CAPS), a Hong Kong-headquartered think tank, noted that corporate funding, on average, accounted for just 5% of the budget of Cambodian social development organizations, a third of the proportion common elsewhere in Asia.
Going forward, CAPS also predicts that due to the pandemic, there is expected to be a pullback in funding and support from foreign NGOs, historically the main supporters of their local counterparts across developing countries. With the arrest of funding and support from foreign NGOs, private sector enterprises and governmental units therefore urgently need to fill the gap to ensure continuity of the good work done at developmental programmes and be ready to offer funding for emergency programmes in the country.