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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.

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Introduction

The natural resources sector merits special attention in the context of investment and development. Many Asian and Pacific countries, including least developed countries, are rich in natural resources which present significant opportunities for growth and development. However, these industries have important economic, social and environmental implications that must be managed. While there is great potential for natural resources development to bring social and economic gains to local populations, these endowments do not automatically translate into poverty reduction and development. In fact, investments in the natural resources sector often have a number of negative impacts that may outweigh many of the gains. More broadly, with rising world populations and the rapid development witnessed in emerging economies around the world, the demand for natural resources, including for energy and food, is rising exponentially. This is putting considerable pressure on fragile ecosystems. As a result, the social and environmental sustainability of these investments is of increasing concern.

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