As nations continue to focus on tackling the COVID-19 pandemic, human civilization is also simultaneously facing one of its greatest challenges – the race for net-zero. This balance, to reduce and eliminate greenhouse gas (GHG) emissions, must be achieved if we are to limit the worst effects of climate change. And with the start of the COP26 global gathering, it is increasingly clear that without talking about a transition to quantifiable, broad-based action, the goal of achieving net zero emissions by at least 2050 will be doomed.
The problem is not that the world community does not agree that action is necessary. A total of 196 countries have signed the Paris Agreement climate change mitigation targets. Achieving net zero therefore requires continued orchestration of diverse stakeholders with different interests, supported not only by bold commitments, but by better policy design and an enabling environment.
A growing role for Southeast Asia
Globally, new UN analysis shows that the world is lagging behind and that the current level of ambition will not sufficiently reduce carbon emissions. In Asia, it’s a similar picture – with Climate Action’s Tracker listing the progress of most countries as “highly insufficient”.
As Singapore rolled out the 2030 Green Plan, Indonesia and Laos have announced net zero targets and a number of countries are exploring carbon pricing schemes, it is concerning that none of the ASEAN countries have a climate plan that meets the objectives of the Paris Agreement.
In this context, the Global Reporting Initiative (GRI) – provider of the world’s most widely used and trusted sustainability reporting standards – and SM Investments, the largest business conglomerate in the Philippines, jointly organized the ASEAN E-Summit. Sustainability on October 21 and 22. 2021. With more than 8,400 over two days, this series of seminars took place under the theme “Leave no one behind: the private sector united for a sustainable recovery from COVID-19 and the achievement of the SDGs ”. Most of the summit discussions can be found in Youtube records.
A business case for net-zero
Some would say that since The GHG emissions of many ASEAN countries are relatively low, in a global context – the Philippines’ emissions represent 0.4% of the world total, for example – why should we act? Federico Lopez, Chairman and CEO of First Philippine Holdings (FPH) Corporation asked the question “why not leave the responsibility to the world’s largest issuers?” “. Yet, as he explained, Southeast Asia, and in particular the Philippines, is one of the regions most vulnerable to global warming, therefore, the country must also respond urgently.
Beyond the impacts on the environment and communities, the price to pay for inaction for the ASEAN region will amount to trillions of dollars. Southeast Asia is a supplier of many global supply chains, from resources and foods such as rubber, rice and palm oil to high-tech manufactures. Yet many of these supply chains are not yet climate-friendly, which risks for the future competitiveness of the region, while continuing to increase energy requirements and emissions.
Leave no one behind in the low carbon transition
Giulia Genuardi, head of sustainability planning and performance management of Enel SpA (Italy) and member of the Global Sustainability Standards Board (GSSB) of GRI, warned that if decarbonization is absolutely necessary, it must be a just transition. As she said, net-zero is a “global movement that requires a coordinated roadmap and collaboration between countries, sectors and industries to ensure that no one is left behind in the process.”
The increase in climatic shocks and the continuation of the pandemic have the most negative impacts on vulnerable communities. Sara Jane Ahmed, Financial Advisor to Vulnerable 20 (V20), emphasizes the importance of building resilience in local contexts and the global economy to tackle inequalities. She explained at the summit that advancing the sustainable development goals must go hand in hand with the low-carbon transition.
However, the transition to a low-carbon economy is not without challenges. Jade Feinberg, SGX Vice President for Sustainability and Sustainable Finance, shared the steps companies can take at different stages of their decarbonization and transition journey and how Climate impact X (CIX) contributes to a comprehensive climate change mitigation strategy. CIX, as a global exchange and marketplace, will provide price discovery, quality standardization, increased confidence and access to high-quality carbon credits for hard-to-reduce emissions.
Businesses move forward to overcome obstacles
All is not lost for ASEAN’s race to zero, with the private sector leading the way and setting ambitious decarbonization targets. As FPH’s Lopez pointed out, “the urgency for all of us is to move beyond progressive sustainability and transform into regenerative forces that align our drivers of profit with the need for a better world, fairer and a safer planet. Massive changes are underway – including shifts in consumer buying habits for greener products, increased corporate transparency on climate impacts through better reporting and halting energy investments in the world. coal – all of this increases the opportunities for companies to participate in net zero goals.
NEO, a real estate developer with a portfolio of seven Green office buildings certified 5 stars BERDE, is the first office portfolio in the Philippines to achieve net zero emissions. Raymond Rufino, CEO of NEO, explained that businesses in small and developing countries can and should do their part to help decarbonise. He also corrected the misconception that only new buildings can be energy efficient, pointing out that there is an even stronger boost for existing buildings as they emit higher GHG emissions.
The need for credible goals and disclosure
Upstream of COP26, 200 companies around the world are committed to zero net emissions by 2040. But how can we ensure that these commitments translate into action? On the flip side of what might be called net zero exuberance, there is an increased risk of “carbon wash ”, according to Dr Kim Schumacher of the Tokyo Institute of Technology and a member of the GRI GSSB. He warned that there is a “massive degree of anticipation of business impact in the form of public relations related to climate change mitigation …
At the capital market level, Andrew Glass, head of sales and partnerships for the Viridios group, shares that environmental artificial intelligence (AI) technology can create trust transparency in the complex markets of voluntary carbon credits and co- benefits, which can help translate the value of ESG into dollars at C-suites and Boards.
Enel, a global leader in sustainable energy, promotes trust and credibility among its stakeholders through sustainability reporting. Genuardi stressed that reports are a fundamental instrument to establish accountability and transparency.
Katrina Francisco, Senior Director of SGV, believes that decarbonization offers opportunities in which companies can create long-term value and embed that value into the narrative of their sustainability reports. As companies progress through their reporting process, Francisco encourages companies to have their reports certified externally, once a strong internal sustainability reporting process is in place, to help build credibility. . When seeking insurance, Dr Schumacher cautions companies against “greenwashing competence”. The newly updated GRI Universal Standards stress that insurance should be carried out by experts who have the necessary credentials and skills.
Time is running out, but hope remains
There are legitimate concerns about whether and how we will reach net zero in time. Warning sirens dare to be heard and the risks – environmental, social and economic – increase if, as a global community, we do not fully embark on the low carbon path.
Yet, as the private sector engagement in the ASEAN region has highlighted, companies are willing to contribute to global solutions. And like the 2021 report of the Intergovernmental Panel on Climate Change states, the climate can still be stabilized, if we redouble our efforts and accelerate the pace of change. It is certainly hope for all of us, a hope that we can only achieve if all organizations, governments – and businesses – work together to secure a sustainable future.