Sustainable local firms get avenue for tie-ups
CAMBODIA, with support from the World Economic Forum (WEF), on May 12 launched the Supplier Database with Sustainability Dimensions (SD2) database, the first of its kind, to provide information on the sustainability operations of domestic companies. SD2 will serve as a key platform linking international and domestic firms that invest in the Kingdom or are seeking new partnerships.
An in-person and virtual ceremony was hosted by the Council for the Development of Cambodia (CDC) and WEF to commemorate the launch, which CDC noted will be especially advantageous for domestic suppliers that can provide quality goods and services.
“The database aims to both facilitate investment and contribute to significant development impact. Domestic suppliers can register their companies on the database, thus promoting their businesses with potential investors who regularly visit [the] CDC website,” CDC said in an announcement.
Delivering the event’s opening remarks, CDC secretarygeneral Sok Chenda Sophea said SD2 will better equip international investors to seize investment opportunities and strike partnerships with suitable domestic companies.
“We hope that investors and foreign firms will see that Cambodia is creating a welcoming investment climate, while being committed to responsible and sustainable business.
“As a relatively small country, Cambodia can set itself apart by being a pioneer in facilitating sustainable investment,” he said. “We invite all investors to use SD2 and find qualified domestic partners.”
Matthew Stephenson, a policy and community lead for International Trade and Investment at WEF, said at the launch that the database will be a tool for international firms that wish to invest or do business in Cambodia.
“Foreign firms that seek to follow ESG [environmental, social and corporate governance] principles can contract more with Cambodian firms that operate sustainably, and other Cambodian firms
may shift their operations to be increasingly sustainable to attract, and qualify for, such contracts.
“Other countries may wish to consider also adding sustainability dimensions to their existing suppliers’ databases, long considered a key tool to facilitate investment,” Stephenson said.
SD2 is managed by CDC and was developed as part of the “Investment Facilitation for Sustainable Development in Cambodia” (IFSDC) project, which CDC launched early in 2019 aiming to collect practical, on-the-ground insights on countries’ experiences with investment facilitation measures.
CDC began its collaborative journey with WEF in May 2019 to carry out the IFSDC project, with the Cambodia Partnership for Sustainable Agriculture’s (CPSA) support.
In May-June 2019, WEF and CPSA conducted expert interviews with more than 50 stakeholders to better encapsulate how to increase investment flows into the Kingdom, in terms of quantity and quality.
Following two workshops and further consultations later that year, creating SD2 was identified as one of the most important project deliverables.
According to CDC, besides “general information on the company – such as its products and services, the database illustrates the sustainability characteristics of selected suppliers.
“There are six sustainability dimensions that registered companies can highlight – and verify – in the database: quality standards and certifications; responsible supply chains; gender and inclusion; environmental sustainability; employee capacity building; and employee care,” it said.
The government is expected to approve the longawaited new Law on Investment this year, which aims to modernise and increase the productivity of local industries and develop greater connectivity in the regional and global supply chain.
Cambodia introduced the Investment Law in 1994 and amended it in 2003.
In 1995, just one year after the law’s enactment, the total amount of investment approved by the CDC totalled some $2.3 billion. By 2008, cumulative approved investment value had surged to $10.89 billion, of which the tourism sector accounted for $8.77 billion, services $1.29 billion and agriculture $106.73 million.
As of December 31, 2019, the cumulative value of approved investments had ballooned to $85.88 billion.
In 2019 alone, the CDC approved $9.40 billion worth of investment projects, of which mainland Chinese investors accounted for $2.75 billion. Hong Kong ranked second at $912.55 million, while Japan took third with $298.84 million.