Responsible Business and Sustainable Investment in the Natural Resources Sector in Asia and the Pacific

image of Responsible Business and Sustainable Investment in the Natural Resources Sector in Asia and the Pacific
Natural resources represent a large share of FDI inflows to the Asia-Pacific region. Covered in this study are oil, gas, mining, hydropower, and large tract plantations such as palm oil and rubber (but not agriculture). These sectors share a number of common features relating both to the nature and the social and environmental impacts of FDI. Growing worldwide demand for these finite resources has made them increasingly attractive investment opportunities. Over the past few years, ESCAP has been actively working to support increased implementation of more inclusive and sustainable business practices in the Asia and Pacific region. This study builds on this work by providing a review of the issues, challenges, instruments and tools related to responsible business and sustainable FDI in the natural resources sector in the Asia-Pacific region. The ultimate objective of the study is to promote FDI that brings a satisfactory return on investment for the business or investor and a positive social return on investment for the host country whilst ensuring environmental sustainability.



Policy challenges

In order to realize development benefits from FDI in natural resources exploitation, governments must secure economic benefits to themselves and to local populations while ensuring that ESG issues are addressed. With regard to FDI this involves striking a delicate balance between creating the right investment climate that attracts the desired investment and offers appropriate protection to investors on the one hand and ensuring inclusive and sustainable development benefits to host countries on the other hand. Once investments are secured, countries face the threefold economic challenge of determining: (1) how to add value to extractive activities, (2) how to capture that value locally, and (3) how to make the best use of the revenues generated to bring about development benefits (UNCTAD, 2007).


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