World leaders are due to convene from Oct31 in Glasgow, Scotland, for the UN Climate Change Conference, otherwise known as COP26.
The main goal of the conference is to secure a global emissions rate of net-zero by 2050 as proposed by the 2015 Paris Agreement. To achieve net-zero emissions, countries must accelerate the phase-out of coal as a viable fuel source; encourage capital investment in renewable resources; promote the use of electric vehicles; curtail deforestation; among other imperatives.
Meanwhile, however, even as countries and companies everywhere, including in Southeast Asia, are embarking on the big transit to clean power, the world is currently in the throes of a major energy crisis — with rationing in China, natural gas shortages and surging power prices in Europe, and petrol stations that recently ran dry in UK (due to a shortage of truck drivers).
For China, amid falling temperatures, the energy crisis ironically had power plants scrambling to stock up on coal, sending its price to record highs earlier this month.
Analysts say the energy woes reflect the challenges and complex nature of the transition to clean power — the switch is expected to take perhaps decades, during which the world will still rely on fossil fuels even as major producers have begun to look into the green pivot.
As the opening session of the Singapore Energy Summit on Monday Oct 25 noted, the world’s transition to a low-carbon future brings with it both challenges and opportunities.
Our Sustainability Leadership group Chair, Joanne Flinn, shared her view on this issue. She said that as businesses decarbonize, business decision making is shifting. It is baking in sustainability to risk management, opportunity maximization and capital investments. This can be challenging when focused on short term profit.
Act now to avoid coal, oil and gas. This reduces your risk as increasingly these will lead contingent liabilities and jeopardise future funds raising. Meanwhile, proactive collaboration for new solutions and services requires new thinking about profit. One with a focus on value generated through impact on cash, community and climate. It’s an elegant transition to profit that wins deep.