News

• 06 December, 2024
• Posted by: EuroCham Cambodia

With environmental and social responsibility getting more attention than ever – from both the public and private sectors – Cambodian businesses are exploring ways that they can incorporate these values into their operations. Enter Sevea Consulting. As one of the sector’s leading firms advising clients on environmental, social and governance (ESG) best practices, Sevea has made a name for itself for providing solutions since 2011. 

With the third edition of the Cambodia Energy Efficiency Competition (CEEComp) – a competition in partnership with Energy Labs letting businesses showcase their responsible energy usage –  wrapping last month, EuroCham’s Senior Communications Officer Stew Post caught up with Director Frantz Vaganay. We discussed what’s changed since the first CEEComp, the private sector’s role in driving change, and what 2025 could look like for Sevea.  

Stew: Through its consultation work, Sevea has become a key player in Cambodia’s ESG space, with the annual CEEComp growing into a flagship initiative for the group. What do you feel have been the biggest challenges to operating this program? 

Vaganay: One of our biggest challenges occurred at the very beginning and actually became one of the reasons we initiated the project. Five years ago, when we first had the idea of launching this competition, there was no regulation related to energy efficiency in Cambodia. 

So, the key question was, if I am a company operating in an environment where there is no regulation, why I should do anything related to energy efficiency? More broadly, there was a very poor level of understanding and awareness about what exactly energy efficiency means.  The challenge for us was to try to initiate momentum where there was, at the time, no regulation and no incentive for the private sector, or any kind of actor, to work towards energy efficiency. 

Nevertheless, we knew that the government was preparing a regulation, so we felt that  we could start embarking the private sector on a journey with early adopters to show that energy efficiency works. So eventually, after we demonstrated that energy efficiency works, we could feed the Ministry of Energy with some information that could  encourage them to put in place regulation, and at the same time, to encourage the private sector to invest in energy and showcase that energy efficiency could work. 

Stew: Within the context of Cambodia’s still-developing regulatory framework for energy efficiency, what role does the private sector in supporting government sustainability goals? Why is collaboration between public and private sectors important for reaching these targets?  

Vaganay: I think the private sector can play key roles supporting the development of regulation. It’s always better if you can rely on things like initiatives and projects that have proven that they can work because, by doing this, you can inspire the regulation. These are things that can be replicated in many other sectors and they prove that small, private sector-led projects can bring a positive outcome and can potentially influence the regulation.  

One of the reasons this works is because, especially in countries like Cambodia where you lack data, if you want to enforce energy efficiency regulations, you need to have data about the energy consumption of buildings. 

Today, the government, led by the Ministry of Energy, is beginning to have a lot of data about buildings, but this was not the case a few years ago. We can contribute to this thanks to our competition’s data collecting processes. So, now we are part of this ecosystem and it has worked to such an extent that today, our competition has been endorsed by the Ministry of Energy because they recognise the pivotal role we play. 

I'm going to give you an example. If you look at the energy efficiency regulations, it says by 2030 they want to reduce carbon emissions for the building sector by I think 25%. So, it's written in the policy but now they need to put it into action. 

Thanks to an initiative like CEEComp we can help the building sector to reduce their energy consumption and reduce their emissions. We could first play a role before the regulation was put in place to demonstrate that energy efficiency works and also afterwards to help with the implementation of the policy.

Stew: How would you compare Cambodia in terms of opportunities to push and expand the space for sustainable development compared to other countries in the region? 

Vaganay: If you look at ASEAN countries – and I will put aside Laos and Myanmar – from my perspective, Cambodia is certainly behind, especially when we are talking about the energy sectors, the regulation on energy efficiency, or even on the new regulation on solar. 

Other countries in the region have had similar regulation in place already for many years, but again Cambodia goes at its own pace and has its own priorities, and the starting line is not the same for Cambodia compared with other countries.  

Having said that, what I like about Cambodia is, for the private sector, it's a country that is a fantastic playground for entrepreneurship. I would say, in this respect, Cambodia is probably ahead of other countries in the sense that it's quite easy, especially as a foreigner, to start a business or initiative and see whether it works or not. 

Stew: Beyond Cambodia’s borders, do you think international pressure on ESG compliance in supply chains will impact local operators? How so? 

Vaganay: Yes, definitely. There will be more and more pressure coming from abroad, especially from Europe. There will be a need for European companies and their subsidiaries across all of their supply chains to comply with new regulations happening in Europe, the CSRD (Corporate Sustainability Reporting Directive), for example. 

And this will come all the way down to Cambodia. We can clearly feel this trend here with the garment sector. We know that more than half of the exports of Cambodia come from the garment sector and, for the time being, the garment sector is in the middle of the radar screen. All the brands have their sustainability strategy, road map requirements, and now understand that they must comply.  

It will start from this and soon after it will come to more local companies because we foresee that there will be regulation here.  Cambodia is developing also its own [ESG] taxonomy, its own regulation. Local companies will need to start thinking on how they anticipate regulation that might come from the local government. 

It is already here for the garment sector, but it will come into other sectors which are heavily reliant on export in Cambodia.  

Stew: To wrap things up, what is 2025 going to look like for Sevea? What does the future of CEEComp look like?  

Vaganay: We are quite optimistic about 2025. There are many sectors which are very vibrant. 

Energy is one of them. Since we implemented the CEEComp in Cambodia, we have had the opportunity to start a new project financed by the government of New Zealand. We will continue using all the expertise we have acquired during CEEComp and we will do capacity building in several provinces of Cambodia for the Ministry of Energy. 

We will raise awareness, do trainings on energy efficiency fundamentals across several provinces in Cambodia, thanks to this fund from New Zealand. So, it's a quite sizeable project. And CEECOMP will be part of this project. 

We will also use this gamified competition approach to raise awareness across other types of buildings. So far, we have only looked at commercial buildings from the private sector but now we will look at a much broader scope of buildings. Now we will start looking at public buildings. We are designing a new competition for industrial buildings and factories as well. 

We also see many other opportunities coming in agriculture, opportunities in everything related to green finance. This is a really promising topic for Cambodia. It's still a sector which is in its very early stages, nascent, but there a lot of opportunities emerging.