Businesses should view climate change not just as a challenge but also an opportunity and a chance for economies to move into sustainable growth, said a Singapore official at the International Singapore Compact CSR Summit today.
Mr. Andrew Tan, chief executive of Singapore’s National Environment Agency (NEA) told the conference that economic uncertainty could further cloud this picture. “The debate over how to tackle climate change comes at a time when many countries, especially in the West, are recovering from a severe economic crisis,” he said.
“In Asia, notwithstanding climate change, two big issues facing countries are political stability and economic growth,” Mr. Tan said. These issues often present immediate development challenges to governments, businesses, and society, whereas climate change is often viewed as an event far into the horizon —a problem to be dealt with down the line.
“I believe we should view climate change as a challenge, but also an opportunity and a chance to prepare countries around the world for more sustainable growth,” he said. “Focusing on renewable energy sources, food security, and other issues would a new economic engine while meeting the realities of climate change.”
Also speaking at the summit, chairman of CSR Asia Richard Welford had a contrarian view.
“I get very worried by the enthusiasm of organisations like UNEP viewing climate change as an opportunity,” he said. “It’s not. It’s a disaster waiting to happen. [Rhetoric about] green jobs, green growth, and green technology—we’ve not seen significant results in these areas so far. While I applaud technologies that can help eliminate greenhouse gas emissions and so on, I have yet to see this make a major impact and I’m cautious on viewing them as the saviour they so often are seen to be.”
Taking a practical approach, Dr. Michael Quah, Principal Fellow & Chief Scientist at the Energy Studies Institute spoke on two key areas: mitigation, and adaptation of climate change.
Mitigation refers to efforts that can be taken to reduce or eliminate the risk of climate change, while adaptation is defined as the ability of our systems to adjust to climate change after it has started to take place.
On the mitigation front, Dr. Quah highlighted initiatives such as the promotion of energy efficiency and conservation, reducing subsidies of fossil fuels, shifting to renewables, and shifting away from private vehicles to public transport. All of these would be effective in lowering energy consumption, and thereby reducing greenhouse gas emissions.
Preservation of ecosystems such as forests, barrier islands and mangrove areas are also necessary to increase geographic resiliency. This would take a concerted effort by government, businesses, and the general public, he noted.
“Business opportunities lie in not only finding alternative sources of energy such as renewables, but also improving the performance of existing systems through energy efficiency.”
Dr. Quah believes that, especially in hot climates, a return to local architectural styles more adjusted to the regional weather would allow for greater energy efficiency.
Another area he highlighted for business is a transition to biofuels to meet transport liquid fuel needs. Biofuel development should involve local production sources, focus on non-feedstock crops such as jatropha and algae fuels, and not be cultivated in areas that jeopardize biodiversity.
The impetus for this transition is apparent: in Asean countries, primary energy demand will expand 76 percent between 2007 and 2030, an average rate of growth of 2.5 percent, a much faster rate than the rest of the world.
Outside of climate change and considerations on emissions, this surge in energy demand also comes at a time when the cost of fossil fuel will increase due to a number of factors.
When it comes to adaptation strategies businesses might pursue, Dr. Quah believes opportunities lie in identifying potential hazards and planning for these eventualities. These include preparedness, response, and recovery efforts. For example, military developments of off-grid technology could be adapted for civilian uses. Micro-grids with energy generation, distribution, and storage in a local area could be adapted for use in rural locations, or ones affected by natural disasters.
Regulation, reporting, and major investment needed
On both mitigation and adaptation fronts, significant financial investment is needed. According to David St. Maur Sheil, Joint Executive Director at Association for Sustainable & Responsible Investment in Asia (ASRiA), some US $8 trillion in infrastructure investments can help spur Asia’s shift to a low-carbon economy over the next decade.
One of ASRiA’s main efforts is the Carbon Disclosure Project (CDP) which is backed by 600 investors managing trillions of dollars of investment capital. CDP serves as a gauge of how adequately businesses are grappling with emissions issues across their operations.
“In Asia, the CDP has gotten a 30 per cent response rate,” Mr. St Maur Sheil said. While 30 percent may sound small, it is promising in the context of developing economies. “Even in nascent Asian markets, there are still leading companies responding to the project. This year the majority of responses are from Korea, India, and Taiwan—countries putting in place regulatory road maps for emissions— on average 25 percent reporting in every major industry group.”
Like Dr. Quah, Mr. St Maur Sheil believes that the biggest gains to be made around meeting carbon targets are around energy efficiency.
The bright news is that many companies are already taking actions to measure and report their emissions, and increasingly are taking action on climate change issues. This is timely as the CDP has revealed that investors increasingly are not just looking for carbon footprint information, they are looking for strong action by management and boards.
In the 2010 CDP Survey, four major trends emerged. There is an increase in bottom-up regulatory pressure, an emphasis on strong governance in significant carbon reductions, an increase in number of opportunities associated with reducing carbon intensity, and an increase in companies anticipating carbon markets in the future. In short, across Asia, visible progress by businesses is beginning to emerge.
While the ultimate outcomes of climate change are still unclear, the current business environment reveals there are numerous pragmatic approaches and reasonable opportunities that can be seized.
As Rajesh Chhabara, Asia Editor of Ethical Corporation, puts it: “Climate change is going to impact businesses in ways we have not known before”.
“Businesses need to join together and do what they can, with negotiations, with new products and services, with alliances—it’s in their own interest.”
Eco-business.com’s coverage of the International Singapore Compact CSR summit is thanks to City Developments Limited (CDL).
