How can Bhutan align its development goals with global Environmental, Social and Governance investment standards to attract more sustainable investments? The international speakers during the recent Bhutan Innovation Forum said Bhutan’s unique approach, centered on the concept of Gross National Happiness establishes high benchmarks for environmental and social responsibility. The speakers highlighted Bhutan’s unique position to lead in sustainability while navigating the challenges of the global economic system or capitalism.
As global demand for sustainable investments increases, Environmental, Social and Governance criteria have become crucial in the decision-making processes of investors.
ESG investing involves allocating funds to companies that meet specific criteria regarding their impact on the environment, society, and governance practices.
Dorji Phuntsho, the CEO of the Royal Securities Exchange of Bhutan who was one of the panelists spoke about how Bhutan’s financial market is still at a nascent stage relying heavily on bank credit and loans from financial institutions for investments.
As for Environmental, Social and Governance, he said it is already deeply rooted since the advent of modern economic development.
“For us to get access to sustainable finance will be very critical. We also see that and anticipate that there will be significant investment requirement in key sectors, particularly green energy and infrastructure, to support the development of Gelephu Mindfulness City. But given the nature of our financial market, for us, we cannot rely on the conventional process, which will entail time.”
Ronald Colman, one of the panelists for the discussion said Bhutan doesn’t need these standards because it has its own robust framework based on the concept of Gross National Happiness which focuses on sustainability.
“Bhutan actually has its own fail-safe immaculate ESG standards. It doesn’t need these standards. It can set a way higher bar. That’s called gross national happiness which happens to be, it’s not just a slogan, it’s an extraordinarily sophisticated and profound development philosophy that’s actually based in Bhutan’s own wisdom traditions that we heard about on the very first day.”
However, he said Bhutan is held back by the global economic system.
Joyce Chang, another speaker, in fact, stressed the need for Bhutan to start with practical use cases and to target investors who are committed to sustainability.
“So I think that Bhutan has, you know, really the right, framework in place already. It’s now setting the foundation. It starts with a use case. It’s partnering. It’s targeting the right investors. And it’s also the reporting mechanism so that it will have to do more on disclosure and reporting and do that with consistency as well. And telling the macro story.”
Irena Spazzapan, the Founding Partner of Systemiq Capital highlighted how Bhutan could incorporate technological innovations in areas such as biodiversity and carbon markets. She emphasized the potential for using AI and genomic sequencing to unlock Bhutan’s rich natural resources for sustainable development.
“You know, Spotify, many of you will know Spotify. If I’m an artist and you listen to my music, I’ll get royalties, thank you very much, and the algorithm of Spotify will enable that you find the music that you like, right? So translate this to the world of biodiversity. I am in Bhutan, I sit on this enormous biodiversity. How do I monetize, right? How do I get in a very transparent and legal way my data into a system that will then enable, you know, a new drug, a new cream, a new glue, whatever it might be, by making that 0.001%, you know, towards 5 and 10% over time, because everything we need is in nature, we just have never found it. And so that system today exists, right, which is really bringing together genomics together with AI. The company that does this, you can look them up, they’re called Basecamp Research.”
As of 2022, about USD 35 trillion in investments worldwide focused on Environmental, Social, and Governance criteria. This means that around 36 per cent of all professionally managed assets take ESG factors into account.
Samten Dolkar
