Inside CR in Asia Pacific

Peter O’Neill, the head of State Street Global Markets and State Street Global Services in the Asia-Pacific region, offers his view on the region’s rising interest in CR.

Q. As CR continues to become a crucial component of the business landscape, how has the Asia-Pacific region embraced CR?

A. Asia Pacific is the fastest-growing economic region in the world. With that growth comes the opportunity to exceed expectations in areas where more developed countries have made their mark. In many ways, it is a case of playing catch-up to the West, but we’re absolutely heading in a positive direction. In Australia, we’ve made significant strides over the years in terms of CR and are seeing increased awareness in Asian countries overall.

Q. Could you offer any examples of this increased awareness?

A. In China, we’re seeing investment in renewable energy and carbon trading. In Japan, there is heightened awareness due to the nation’s plight during the natural disasters. The stock exchanges in Singapore, Shanghai and Hong Kong continue to encourage that organizations increase their CR reporting and commit to promoting sustainable economic and social development. In Australia, superannuation funds are driving the trend by increasingly incorporating ESG factors into their portfolios. Also, various CR councils and committees have emerged, signifying a collaborative approach to embracing CR in the region.

Q. How does State Street support CR in the Asia-Pacific region?

A. CR is a core part of our business in all of the 29 countries we operate in. We are always finding ways to increase our reputation in CR, specifically as it relates to helping our clients invest more responsibly, creating a workplace that encourages our employees to excel and doing everything we can to improve ES in all of our operations. In Asia Pacific, some examples of our work in this area include executing our first carbon credit in China, as well as the opening of our new offices in Sydney, which received the highest green certification and helped open a lot of doors to potential clients. We are looking at other buildings in the region that offer the same green credentials, though we have not made any decisions at this time.

Q. How does CR impact future plans for State Street and the overall business environment in the Asia-Pacific region?

A. State Street’s footprint will mirror our commitment to CR moving forward. As awareness continues to increase in the region, which we continue to see year by year, State Street is prepared to offer the products and services our clients are demanding and will continue to foster a culture that employees seek in an employer. As more and more organizations in the region begin to see the tangible benefits of CR, I believe it is inevitable that CR will become part of doing business here.

Procurement: Focused on Best-in-Class Service

Since stepping into my role in mid-2011, I’ve had the opportunity to evaluate the state of the procurement function, clarify the expectations from our company’s leadership, define our value proposition and devise tangible strategies for Global Procurement Services (GPS) as we continue to support State Street’s strategy. In this challenging yet exciting time, the GPS team is focused on being a business partner that continues to add value by setting procurement standards, identifying suitable suppliers, and negotiating price and contract terms favorable to the corporation. This transition is facilitated by best-in-class processes, technology and tools.

With the introduction of new industry-leading technology, we can deliver on our spend management and asset governance goals. Specifically, we are working with the Enterprise Risk Management and Compliance teams to launch the Risk Assessment Management Program (RAMP), which will help us to better identify and assess potential risks from using third-party suppliers and service providers. During the first half of 2012, we deployed an eProcurement (ePass) suite of tools to enable consistent, transparent purchasing practices across our US-controlled spend base. Once this program is fully tested, it will be rolled out globally.

To optimize savings opportunities, we have analyzed expense categories and, in conjunction with business partners, are refining strategies to identify supplier spends that can be reduced across the globe. We will shape cost through demand management and competitive bidding. Our plan going forward includes establishing deeper partnerships with suppliers and negotiating appropriate price and contract terms, leveraging our scale and global volume, and consolidating contracts across business groups.

During 2011, the procurement team played a key role in various transformation and cost efficiency projects across the corporation, where we helped business partners' negotiate and select critical suppliers. The focus on execution demonstrated in these projects and the use of best-in-class processes and tools will be the hallmark of our organization as we continue to support our business partners' strategies in 2012 and beyond.