• Adam Harper

Asia should lead on the climate crisis, not follow

With the International Energy Agency warning that the world may only have six months to change the course of the climate change, now is the time for governments and companies in Asia to bring a new sense of urgency and boldness to their climate commitments. Gradual change, eye-catching initiatives and positive words alone will not drive the necessary change. This is a response that Asia has the opportunity to lead: doing so will require policymakers, management teams and boards to treat it like the crisis it is.

Governments and companies have gained a lot of crisis experience with Covid-19, proving that we can make overhaul the way we live and work at great speed when doing so matters to society. Radical change will also be required to address the climate crisis – in the energy mix, across industry and in transportation infrastructure, among other areas,

We’re already starting to see global governments and companies make those kind of changes. The European Union’s recovery plan includes modernising buildings and infrastructure and creating a million new green jobs. The UK’s Financial Conduct Authority is consulting on a proposal that would require listed companies to state whether they comply with the rigorous recommendations of the Taskforce on Climate-related Financial Disclosures – or explain why not.

In the corporate world, Amazon is making a US$2bn investment in “sustainable and decarbonizing technologies” as it tries to bring forward its 2030 deadline for powering operations with renewable energy to 2025. It has also pledged to eliminate or offset carbon emissions by 2040 and challenged other companies to do the same. 

But there is no reason why Asia should lag behind in showing leadership on climate change. The region accounts for some 50% of global carbon emissions and three quarters of its coal consumption. So it is actually essential that Asia is at the forefront of the shift towards less carbon-intensive growth if the world is to meet the goals of the Paris Agreement.

Only one Asian country has so far committed to achieving net zero emissions (South Korea, by 2050), though, in spite of growing evidence that societies around the region see climate change as a crisis. An April survey conducted by Ipsos found that 71% of respondents globally agree that climate change is as serious a threat over the long term as Covid-19. It was 87% in China, 81% in India and 72% in Japan – three of the world’s top five carbon emitters.

Of course, Asia is home to large developing countries that rely on coal-fired energy to drive growth. They can argue that they don’t have the luxury of turning away from a cheap and proven form of energy at a time when they must prioritise economic recovery. But, given sufficient investment capital and political will, the notion of a trade-off between growth and clean energy may prove to be a thing of the past. As Bloomberg wrote in this excellent piece about policies to support a green recovery: “ Investing in a post-carbon economy isn’t just a way to avoid a climate catastrophe. It could also be the most prosperous way forward.”

The challenge, then, is for companies and governments in Asia to prioritise finding a pathway to net zero and then communicate it boldly and clearly. This will be crucial to attracting the capital required for this transition. Policymakers need to lead the way (according to the International Energy Agency, government decisions guide about 70% of the world’s spending on energy) but Asian companies should also be focusing on how they will get to net zero in their own operations - and by when.

I believe climate – as well as social factors – will be the defining tests of corporate leadership over the decade ahead, in Asia and globally. Globally, organisations that can show they recognise that the climate crisis is a crisis – and act accordingly – should achieve a strong and growing resonance with investors, customers, employees and other stakeholders. I hope that Asian enterprises will be in the front rank.

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