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How this century-old firm is championing sustainability

Being one of Asia's first carbon-neutral companies, Jebsen & Jessen (SEA) makes sustainability a priority and is willing to turn down profitable projects if they fall short of the company's green requirements.

"There were certainly investment decisions which we have not taken and businesses which we have gotten out of. People questioned maybe because there's a certain degree of spoilsport. But there are also businesses that we went into thinking and hoping that there's money to be made," chairman Heinrich Jessen told CNBC's "Managing Asia."

One of which was ditching plastic-based covering and opting to produce paper-based packaging for the electronics industry in 1997.

"We made a rather large investment in paper-based packaging from recycled news print, [but] it turned out that the market was much smaller than we had thought. We're still doing the business though, because it fits the philosophy of going green," Jessen who has a master's degree in Industrial Environment Management from Yale University said.

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Based primarily in Southeast Asia, Jebsen & Jessen (SEA) Pte. Ltd is an industrial conglomerate with a history that stretches back 120 years. It owns and operates businesses in areas such as cable technology, chemicals and information technology.

The company went carbon neutral in 2011 and pushed for all of its business units to be ISO certified. Other environmentally-friendly policies include the banning of toxic chemicals such as solvents in its paints and the exclusion of shark fin soup - a mainstay of Chinese cuisine that's often seen as auspicious - at company dinners. Moving forward, the company has plans to further reduce its carbon footprint.

Heinrich Jessen, chairman of Jebsen & Jessen (SEA).
CNBC
Heinrich Jessen, chairman of Jebsen & Jessen (SEA).

But moving sustainability up the priority list comes at a cost. When asked how he balances his ideals with the need to keep the company profitable, the former tropical ecologist said: " We tried a number of things which frankly didn't work out because people [and] the market are not willing to pay a premium yet. But I think making money also comes from saving money. Ultimately when you save resources, you are saving money."

"So, a major part of our 'sustainability-equals-profits' mantra ultimately stems from saving costs or reducing risks," Jessen added.

While he noted that the company's insurance premiums have "come down quite drastically as insurers [noted] a reduction in risks," the benefits of going green remain few and little.

For one, the policy of carbon neutrality has not yielded the company additional support from its clients. "There's no customer who said: "Because you're carbon neutral, I will place my order with you."

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From the end of regulators, companies are also not recognized for their efforts to operate in a more environmentally friendly way. Hence, Jessen recommends the implementation of a carbon tax.

"There are no tax savings when it comes to carbon neutrality and there's not much interest from the market so that is disheartening," he said.

Despite these, the third-generation boss told CNBC he is not giving up on his pursuit for greener pastures "I think somebody's got to [take a] lead in this... There will be a critical mass at some point that will take this on and I think it doesn't harm to be the model for that."

— This interview with Heinrich Jessen, chairman of Jebsen & Jessen (SEA) is the final installment of a five-part special series called "Managing Asia: The Next Generation". CNBC's Christine Tan spoke to leaders from the second- to fourth generation in Asia, to find out what it takes to transform family businesses to new levels of growth.