AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateActionWHITEPAPERAPRIL2023IncollaborationwithBostonConsultingGroupandSAP更多报告请关注公众号：全球行业报告库Images:GettyImages,Unsplash©2023WorldEconomicForum.Allrightsreserved.Nopartofthispublicationmaybereproducedortransmittedinanyformorbyanymeans,includingphotocopyingandrecording,orbyanyinformationstorageandretrievalsystem.DisclaimerThisdocumentispublishedbytheWorldEconomicForumasacontributiontoaproject,insightareaorinteraction.Thefindings,interpretationsandconclusionsexpressedhereinarearesultofacollaborativeprocessfacilitatedandendorsedbytheWorldEconomicForumbutwhoseresultsdonotnecessarilyrepresenttheviewsoftheWorldEconomicForum,northeentiretyofitsMembers,Partnersorotherstakeholders.ContentsForeword3Executivesummary41ThebattlefornetzerowillbewonorlostinAsia51.1Asiarepresentstheworld’sbiggestopportunity7forpositiveclimateresults1.2Thecurrentresponsetotheclimatechallengeisinadequate71.3Changewon’tbeeasyaskeychallengesremainatbothregionalandcorporatelevels81.4Asiahasmuchtoloseinaclimateemergency102It’stimetoadapttowhat’stocomeandmitigateitseffects112.1Adaptingtoawarmerworld112.2Mitigatingtherateofchange132.3Asingleapproachwillyieldgreatopportunities132.4Energizingajusttransition153Thecorporateclimateframework203.1Whattodofirst:immediateactions213.2Whatgoodlookslike:ZuelligPharmadrivesimpactthrough22transparenttargets3.3Enablingtransformationinthemediumterm243.4Whatgoodlookslike:CityDevelopmentsLimitedinveststoaddressemissionsacrossthevaluechain263.5Unlockingnewgrowth273.6Whatgoodlookslike:Olamcombinesdigitaltransformation28andclimateaction4Followyourambitionswithcommittedactions30Contributors31Endnotes32ContentsAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction2ForewordThepast12monthswereslatedtobeayearofsustainabilityaction.The2022UnitedNationsClimateChangeConference(COP27)inEgyptsawabreakthroughinfundingforthelossanddamageclimatechangehaswrought.NewlegislationintheUnitedStatesandAustraliaraisedhopesandfuelledfurtherclimateinvestment.Whilethesedevelopmentsarewelcome,thecurrenttrajectoryonclimateactionisstillinsufficient.Abidingbyexistingpoliciesandstrategiesonlyservestomaintainastatusquothatisharmfultoourplanet.Asiarepresentstheworld’sbiggestopportunitytomaketangiblechange.ThesizeofAsianpopulationsandeconomies,togetherwiththeregion’senormousgrowthpotential,offersgreatupsidesforclimateaction.BusinessesacrossAsianeedtobeattheforefrontofthedrivetowardsclimateaction.Corporateentities,whetherprivateorstate-owned,areresponsibleforanoverwhelmingshare,some51%,ofglobalemissionsandbearastrongresponsibilityforacceleratingclimateactionefforts.Alongsideboldpolicydevelopmentfromgovernments,businessescanplayacriticalroleinmitigatingclimateimpactwhilealsoboostingtheirowncompetitiveadvantage.Thisreport,preparedjointlybytheWorldEconomicForum,BostonConsultingGroupandSAP,providesabusinessperspectiveonclimateaction.Thefindingsofthisreportarebasedonfirst-andthird-partyquantitativeandqualitativeresearchfromacrossAsia.WeconductedinterviewswitharangeofseniorexecutivesfromleadingAsiancompaniesacrosssectors–fromenergytotransportandfromindustrialsectorstoagriculture.Ouranalysiswassupplementedbyadditionalresearchfromarangeofsources,includingtheInternationalEnergyAgency(IEA),ClimateWatch,theUNIntergovernmentalPanelonClimateChangeandtheWorldBank,inadditiontopreviousworkundertakenbyBostonConsultingGroupandSAP.Theambitions,commitmentsandpromiseswehearregularlyaremeaningfulonlyifcombinedwithalliedactions,bothtodayandtomorrow.Businessesmustplantheircorporateclimateactionframeworkacrossthreekeyphases.First,theymusttakeimmediateactiontomeasurebenchmarks,settargetsandintroduceemissionreductionsolutions.Second,theymustmobilizeresourcesandaccelerateecosystemcollaboration.Andthird,theyshouldbegintounlockgrowthwithintheirvaluechain–andbeyond.Weliveinanageofurgency,andAsiaisaregionthatwilldecidethesuccessofglobalclimateactionefforts.OnlybycommittingtoboldandimmediatechangecanAsianbusinessesandtheirleaderscontributetoabrighterfutureforourplanetandbetterlivesforourpeople.GimHuayNeoManagingDirector,CentreforNatureandClimate,WorldEconomicForumPaulMarriottPresidentAsiaPacific&Japan,SAPNeerajAggarwalChairmanAsiaPacific,BostonConsultingGroupAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateActionApril2023AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction3更多报告请关注公众号：全球行业报告库ExecutivesummaryThesuccessofclimateactionincorporateAsiawillhaveanexponentialinfluenceontheworld’snet-zerotransition.Theneedforclimateactionhasneverbeenbetterunderstood.Butnowisthetimeforaction.Asia’scompaniesfaceconsiderableriskfromclimatechangebutalsohaveoneofthemostsignificantopportunitiestorealizeeconomicbenefits.Asiarepresentsthebiggestopportunityforglobalclimateaction.Inadditiontobeingthedrivingengineofglobaleconomicgrowth,Asiaalsoproducesthebiggestshare(51%)ofcontemporaryglobalemissions.YetthepolicyandcorporateresponseinAsiaisnotcurrentlyproportionaltotherisktheregionposes.Realizingthisopportunityrequiresmanaginguniquechallenges.Asia’senormousdiversityandcomplexitymeanstherecanbenosinglesolutiontoclimatechange.Theregioncontainssomeoftheworld’sfastest-growingeconomies,leadingtoincreasingdemandformore,lower-costenergy.YetAsiahasmoretolosethanmost.Evenbeyondtheterriblepotentialimpactonpeople’slives,Asiaiseconomicallyvulnerabletoclimatechange,with26%ofGDPpredictedtobeatriskiftemperaturesincreaseby3.2°C.Andthecountriesthataretheleastabletodealwithdisasteraremostatrisk,asrecentclimateeventshaveshown.Adaptationandmitigationmustbepursuedwithequalforceandurgency.Thegoalofreducingglobaltemperaturesthroughclimatemitigationremainscritical.Butleadersmustalsoacknowledgethatawarmerworldisinevitable,andadapttoitsdemands.Afocusonadaptationshouldnotminimizeeffortsorinvestmenttomitigateclimatechangebutcomplementitsaims.Thereportisaguidetocorporateclimateaction.BusinessesacrossAsia,ineveryindustry,haveafundamentalresponsibilitytoactandwillhavetoadapttonewrealitieswhilesimultaneouslycontributingtoabroadernet-zerotransition.UsingtheexamplesofsomeofAsia’sleadingorganizations,thereportprovidesaframeworktoguidebusinessesonimmediate,medium-termandtransformationalsteps.Thebusinesscaseforclimateactionisclear.Organizationsthatignoreorhedgetheirstrategiesgambletheirethics,revenuesandcompetitiveadvantage.It’stimeforleaderstomakeboldchangeforthegoodoftheirbusinesses,andtheworld.Weareinalife-or-deathstruggleforourownsafetytodayandoursurvivaltomorrow.Thereisnotimeforpointingfingersortwiddlingthumbs…Everygovernment,everybusiness,everyinvestor,everyinstitutionmuststepupwithconcreteclimateactionsfornetzero.AntónioGuterres,UNSecretary-General,October2022AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction4ThebattlefornetzerowillbewonorlostinAsia1Despitetheincreasingthreatofclimaterisk,therearereasonstobeoptimistic.Theworldissettomissthe1.5°CtargetoutlinedintheParisAgreement.1Thereisclosetoa50/50chancethatglobalcommunitieswillbreachthistemperaturethresholdinthenextfiveyears,2bringinganincreasedthreatofclimateriskssuchasextremeweathereventsandrisingsealevels.Butthereremaingroundsforoptimism.DevelopedcountriessuchastheUnitedStatesandAustraliahavepassedlong-hoped-forlegislationcommittingtoamoresustainablefuture,andtheworld’sbiggestannualcarbonemitter,China,hasrecordedfallingemissionsinrecentmonths.3Yetsignificantlymoreneedstobedone,andquickly.Theworld’ssuccessorfailureinachievingitssharedclimategoalswillbecriticallydependentontheperformanceofcountriesandcompaniesinAsia.Asaregion,Asiaisresponsiblefor51%ofannualglobalgreenhousegas(GHG)emissions,withChina,India,Japan,IndonesiaandSouthKoreatogetheraccountingfor43%oftheoveralltotal(Figure1).TheAsia-Pacificregionisresponsiblefor~50%ofannualglobalGHGemissionsFIGURE1Percentageofworld’sCO2emissions0–10%10–20%20%+NorthAmericaEuropeMiddleEastAfricaEurasiaAsia-PacificSouthAmerica16%16%3%11%4%5%51%6%Source:ClimateWatch;BCGAnalysisAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction5更多报告请关注公众号：全球行业报告库Thescaleofemissionsextendsacrossindustries.Asiaaloneisresponsibleformorethanhalfofannualemissionsinmajorindustries–electricity,manufacturing,industryandlanduse.4ButtheimpactofAsia’sclimateresponseshouldn’tbeconsideredinavacuum.Asianclimateactionhasadirectimpactonthehealthofthewholeplanet.AsianeconomiesincludingChina,SouthKorea,Indonesia,MalaysiaandJapanplayasignificantroleinglobalsupplychains.ThatresultsinlargeinterregionalflowsofembeddedCO2emissions(Figure2).Asia’sprominenceinglobalsupplychainshasasignificanteffectonemissionsflowsFIGURE2SouthKorea29.360.3Japan20.457.874.169.4136.180.1RegionsOutgoing(Mt)Incoming(Mt)61.215.60.517.95.025.6Outgoing(Mt)Incoming(Mt)ASEANChinaRoWNewZealandAustraliaAustraliaNewZealandRestoftheworld(RoW)ChinaASEANJapanSouthKoreaOUT:5.0IN:25.6OUT:0.5IN:17.9OUT:61.2IN:15.6OUT:136.1IN:80.1OUT:74.1IN:69.4OUT:20.4IN57.8OUT:29.3IN:60.3Source:SpringerNature,2022Note:Largestinterregionalflowsofcarbonintradein2021,measuredinmillionsofmetrictonsCO2equivalent;Mt=millionsofmetrictonsAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction6ThescaleofopportunityinAsiacannotbeunderstated.Theregionishometoalmost60%oftheworld’spopulation,5accountsfor53%ofprimaryenergyconsumption6andgenerates45%ofglobalgrossdomesticproduct.7Asiaisresponsibleformorethanhalf(53%)ofthereductionneededtoachievetheInternationalEnergyAgency(IEA)’sSustainableDevelopmentScenarioby2050,including88%oftherequiredreductioninglobalcoalemissions.8Theregionhasnotyetrealizeditsfulleconomicpotential.DrivenbyChina,IndiaandrapidlydevelopingeconomiesinSouth-EastAsia,Asiaisexpectedtoseegrossdomesticproduct(GDP)growthatrateswellabovetheglobalaverage.9Yetdespiteitsleadinpopulationandeconomicgrowth,AsialagsinpercapitadevelopmentacrossGDP,energyconsumptionandGHGs.10Anyincreasesintheseareaswillfurtheraffectclimateandmakethechangerequiredhardertoresolve.1.1Asiarepresentstheworld’sbiggestopportunityforpositiveclimateresults1.2ThecurrentresponsetotheclimatechallengeisinadequateRegionaldecarbonizationrateshighlighttheneedforactionFIGURE3RegionaldecarbonizationratesEmissions/GDPchange,%CAGRfortheperiod2010–20202015–20202010–2015-2.9%-3.5%-2.2%-2.5%-3.2%-1.8%1.6%1.1%2.1%2.7%0.4%5.0%1.3%3.2%-0.5%2.3%3.9%0.6%-0.7%-1.5%0.1%Worldwideaccelerationafter2014ParisalignmentWorldEUUSChinaIndiaSEARoAPRelativedecouplingofemissionsfromGDPindevelopedcountriesAPregionneedstoacceleratedecouplingandturnthetrendTheglobalactionrequiredtolimitclimatechangeto1.5°Ciscurrentlyinsufficient.Therateofdecarbonizationbetween2015and2020stoodatjust-1.5%globally–thistrajectorywouldleadtoatleasta3°Cincreaseintemperaturesby2030(Figure3).Decarbonizationratesof6%areneededtolimitwarmingto2°C,andof16%forthetargetof1.5°Cby2030.Asia’sdecarbonizationrateremainssignificantlybelowtheworld’saverageandisn’texpectedtoimproveinthenearfuture.Assessmentoftheregion’sexistingnationalpoliciesandcommitmentsimpliesthatcarbonintensitywillremainatthesamelevelforthenextdecade,withaccelerationofdecarbonizationhappeningonlyafter2030.Thesameanalysispredictsanincreaseinrenewableenergyasashareoftheenergymixofjust5%by2030,whileenergysupplyisexpectedtogrowby18%.Note:CAGR=compoundannualgrowthrate;SEA=South-EastAsia;RoAP=restofAsia-PacificSource:ClimateWatchHistoricalGHGEmissionsData,BCGanalysisAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction7更多报告请关注公众号：全球行业报告库Atacorporatelevel,therehasbeenanencouragingaccelerationinthenumberandscaleofcommitments,aswellasinreportingonclimateactioninitiatives.In2021,3,879companiesinAsiadisclosedtheirclimatetargetsandemissionsthroughtheCarbonDisclosureProject(CDP)–a29%increaseyear-on-year.However,onlyaround900ofthosecompanieshadadoptedscience-basedtargets,andjust300(8%)hadnet-zerotargets.Thereisalsoworktobedonetoturncommitmentsintoaction,withonly38%ofcompaniesreportingthattheyarefollowingaspecificlow-carbontransitionplan.111.3Changewon’tbeeasyaskeychallengesremainatbothregionalandcorporatelevelsAtamacrolevel,therecanbenosingleapproachforsuccessinAsia,giventheregion’scomplexityanddiversity.Asiaishometo49countriesand2,300languages–andtherearesignificantdifferencesinkeyindustries,naturalresourcesandeconomicconsiderationswithinindividualcountries,letaloneacrossborders.Strategiesmustbetailoredforeachcountry,takingintoaccountdemographicandsocioeconomiccircumstancesaswellasthecurrentmaturityofclimateactiondevelopment.Balancingmacroprioritieswillbeachallenge.Asiacontainsseveralfast-growingeconomiesthatarelikelytoseeincreasingdemandforlow-costandabundantenergyastheydevelop.Gapsinaccesstothatenergymustbebalancedwiththecleanenergytransitiontoensureequitablegrowth.Thistransformationrequiressignificantinvestment–regionssuchasSouth-EastAsiaandIndianeedtodoubletheircleanenergyinvestmentstoevenmeettheirStatedPoliciesScenario(STEPS)goals(Figure4).12CleanenergyfundingneedsnewimpetuseventoreachstatedgoalsFIGURE4CleanenergyinvestmentbyregionasashareofGDP,2015–2030CleanenergyinvestmentinSouth-EastAsiaEurasiaMENASub-SaharanAfricaIndiaSouth-EastAsiaLow-emissionfuels2Efficiencyandend-useCleanelectricity3Shareofclean40%4%2%6%8%2016201820202026–2030SDS1010050150100%$B(2020)50%0%2015201620172018201920202021ESTEPS2026–2030+123SDS1SDSreferstotheIEA’sSustainableDevelopmentScenario;2Low-emissionsfuelsincludemodernsolid,liquidandgaseousbioenergy,low-carbonhydrogenandhydrogen-basedfuelsthatdonotemitanyCO2fromfossilfuelsdirectlywhenusedandalsoemitverylittlewhenbeingproduced;3Cleanelectricityincludeslow-carbongeneration,powerinfrastructuregridsandbatteries;4“Shareofclean”=cleanenergyinvestmentasashareoftotalenergyinvestment.Investmentismeasuredasongoingcapitalspendinginenergy-supplycapacity(fuelproductionandcleanelectricity)andincrementalcapitalspendingaboveabaselineforenergyend-useandefficiencysectors(inbuildings,transportandindustry)Source:IEA,South-EastAsiaEnergyOutlook2022:https://www.iea.org/reports/southeast-asia-energy-outlook-2022AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction8Meanwhile,corporateAsiaismakingslowprogress.Today,50%ofAsianbusinessesbelievethataddressingenvironmentalissueswillbematerialtobusinessresultswithinthenextfiveyears.13Butthereremainbothexternalandinternalbarrierstocorporateprogress.Externally,majorpolicydevelopmenthaslargelystalled14andtherearestillnostandardizedglobalreportingformats,noraglobalcarbonprice.Whileconsumerinterestinenvironmentallyresponsiblegoodsisstrong,higherpricingandloweravailabilityofsustainablegoodshashinderedadoption.15Internally,keyobstaclesincludingstrategyalignment,datauseandaccesstoresourcesarestillbeingtackled.Uncertaintyisthetopcriticalbarrierforbusinesses,though42%ofSouth-EastAsianbusinessessaylackofenvironmentalstrategyisholdingthemback,while33%pointtowardslackoffunding(Figure5).16AnotheruniqueaspectofcorporateAsiaistheprevalenceoffamily-runbusinesses.Asmanyas300ofthe500largestcompaniesbyrevenueinIndiaarefamily-ownedandoperated.Thisoffersauniquechallengeandopportunityforclimateaction.Dataiscriticaltobenchmarkclimateactionandsettargets,yet59%ofSouth-EastAsianbusinessesarenotcompletelysatisfiedwiththeirabilitytoaccuratelymeasuretheirenvironmentalimpact:20%ofSouth-EastAsiancompaniesrelysolelyuponassumptionsandestimatestoassesstheenvironmentalimpactoftheirsupplychain.ThebarrierstocorporateclimateactionvaryFIGURE5UncertaintycausedbyCOVID-19pandemicTimingStakeholderindifferenceNobusinesscaseCapabilitygapsNobarriersCustomerindifferenceLackofsupportfromseniormanagementInabilitytogetpartners/supplierstoactNotabusinesspriorityOrganizationalresistanceActionsnotrequestedbypartnersNotnecessaryascompetitorsaren’ttakingactionLackoffundingDoubtfulaboutabilitytomeasureimpactonenvironmentLackofnecessaryexpertiseUnclearhowtoembedsustainabilityintobusinessprocessesandITsystemsUnclearhowpotentialactionswouldalignwithorganizationalstrategyLackofenvironmentalimpactstrategyDon’tknowwheretostartLackofnecessaryexpertiseWehavehadnospecificbarriers49%27%21%20%18%17%17%12%33%24%29%27%22%42%9%32%8%Note:South-EastAsia(N=580),percentagewhochoseabarrieranywhereintheirtop5Source:SAPAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction9更多报告请关注公众号：全球行业报告库1.4AsiahasmuchtoloseinaclimateemergencyTheworryingfactisthat,evenifthe1.5°CtargetssetintheParisAgreementareachieved,Asiawillstillbearthebruntofmore–andmoreextreme–weatherevents,aswellasashiftinitsbroaderclimate.At1.5°C,Asiancountrieswillstillhavetodealwithasmanyas60millionpeopleaffectedbycoastalfloodingeveryyear,ariskoflong-termdegradationto70%ofcoralreefsthroughbleaching,around5%lowercropyieldsanda1.8timesincreaseinheatwaves.17However,theworld’scurrenttrajectoryistoseea4°Cincreaseby2100.Theresultsofsuchwarmingareunconscionable–severefoodcrises,an8.2%increaseinheatwavesandthepotentialfloodingofanumberofcapitalcities.InAsia,risingsealevelsarealreadyathreat.Almost12%ofSouth-EastAsia’spopulationisevennowatriskofdisplacement,18andbigurbanmetropolisesareinrealjeopardy.Jakartaisthefastest-sinkingcityintheworld,whilecentralTokyo,ManilaandBangkokareallatextremeriskoffloods.19Themostsignificanteffectofclimatechangewillbeonpeople’slivesBOX1Thebiggest–andmostimportant–impactofclimatechangewillbetopeople’slivesandlivelihoods.Eventoday,thereisevidencethatatleast85%oftheglobalpopulationhasexperiencedweathereventsmadeworsebyclimatechange.20Thatnumberwillonlygrow.Whilethoseimpactsaredisturbing,thisreportisprimarilyfocusedoncorporateactionand,assuch,theeconomicandorganizationalimpacts.Asia’sexposuretoclimateriskmakestheregionparticularlyvulnerable.Whileglobaltemperatureriseswillaffecteconomiesineverycorneroftheglobe,Asiaisinextremedanger.Basedonasevereincreaseof3.2°C,AsiaisprojectedtoseeareductioninGDPofmorethan26%,trailingonlytheMiddleEastandAfrica(-27%).Infact,South-EastAsiafaresevenworse,withanexpectedhitof37%–byfartheworst-affectedregionaroundtheglobe(Figure6).Itispastthetimeforeconomiesintheregiontotakenotice.FourSouth-EastAsiannations–Myanmar,thePhilippines,VietNamandThailand–areamongthetop10countriesmostaffectedbyclimatechangeinthepast20years.21ThepotentialGDPimpactcouldcauseevenfurtherpain.Considertheeffectthattheprojected46%dropinGDPcouldhaveonSingaporeorMalaysia,a43%GDPdroponThailandora39%GDPdroponIndonesia.22GlobaltemperatureriseswillnegativelyaffectGDPinallregionsbymid-centuryFIGURE6Wellbelow2°CincreaseParistarget3.2°CincreaseSeverecases2.0°Cincrease2.6°CincreaseThelikelyrangeofglobaltemperaturegainsWorldOECDNorthAmericaSouthAmericaEuropeMiddleEastandAfricaAsia-PacificDevelopedAsiaASEANOceania-21%-33%-12%-12%Simulatingforeconomiclossimpactsfromrisingtemperaturesin%GDP,relativetoaworldwithoutclimatechange(0°C)-4.2-11-13.9-18.1-3.1-7.6-8.1-10.6-3.1-6.9-7.4-9.5-4.1-10.8-13-17-2.8-7.7-8-10.5-4.7-14-21.5-27.6-5.5-14.9-20.4-26.5-3.3-9.5-11.7-15.4-4.2-17-29-37.4-4.3-11.2-12.3-16.3Source:SwissReInstitute,TheEconomicsofClimateChange:NoActionNotanOption,2021:https://www.swissre.com/dam/jcr:e73ee7c3-7f83-4c17-a2b8-8ef23a8d3312/swiss-re-institute-expertise-publication-economics-of-climate-change.pdfAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction10It’stimetoadapttowhat’stocomeandmitigateitseffects2Thesolutiontotheclimatechallengeistocreateastrategythatacknowledgestherealityfacedwhilealsoworkingtosignificantlyslowthepaceofglobalwarming.Achievingthisgoalrequirestwoequallycriticalstrategies–adaptationandmitigation.2.1AdaptingtoawarmerworldAdaptationisnotanalternativetoaredoubledefforttostopclimatechange,butanessentialcomplementtoit.Failingtoleadandactonadaptationwillresultinahugeeconomicandhumantoll.GlobalCommissiononAdaptation23Adaptationasaconceptconcedesthattheworldwillcontinuetowarm,evenifeverytargetandgoalthathasbeensetismet.Itrecognizesthatchangeswillneedtobemadetodealwiththeresultsofthatwarmerworld.Afocusonadaptationdoesnotconcedethatthebattletomitigatetheeffectsofclimatechangehasbeenlost.Instead,theeffectsofachangingclimatehavetobeunderstoodandmanagedtoday,whileactivityisincreasedtomitigatechangeinthefuture.Adaptationmustbeconsideredlocallyastheimpactsofclimatechangearenuancedandparticulartothecountry-specificcontext(Figure7).Thisrequiresprimarilylocalactivationsfocusedonshort-termreductionsinriskandinvestmentsinsystemandinfrastructureresilience,withsimilarlylocalbenefits.Inparticular,differencesintherelianceonfoodsystems,thelevelofvulnerabilitytodisastersandexistingadaptationplanningmustbetakenintoaccount.AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction11AdaptationcostsdiffermarkedlyacrosscountriesPotentialreturns(10-yearbenefitoverafive-yearinvestmentperiod)FIGURE7FIGURE8MalaysiaNegligibleinitiativesAdaptioncost,billiondollarsperannum1201910ChinaFocusedonalready-visibleeffects,e.g.droughtandfloodimpactsonfoodsecurityIndiaUncoordinatedandledbylocalgovernmentsinvulnerableareasIndonesiaFocusedoninfrastructure,e.g.movingcapitalfromJakartatoKalimantanAgricultureInfrastructureDisasterplanningHealth12.0%20.0%36.7%7.0%10.0%71.0%1.4%43.4%18.5%0.0%73.0%7.0%12.0%1.0%72.0%15.0%Early-warningsystemsInfrastructureresilienceAgriandfoodsecurityProtectingmangrovesWatermanagement~9x~4x~4x~5x~6xThebenefitsofadaptationareclear,frommitigatingfutureriskandavoidingloss,todirecteconomicandsocioeconomicbenefits.Overthecourseofadecade,potentialreturnstallyuptoa9xreturnonearly-warningsystems,a4xreturnoninfrastructureresilienceanda5xreturnonagricultureandfoodsecurity(Figure8).Source:GlobalCenteronAdaptation,StateandTrendsinAdaptationReport2020:https://gca.org/reports/state-and-trends-in-adaptation-report-2020;WorldResourcesInstitute;BCGanalysisSource:WorldBankGroup,EconomicsofAdaptationtoClimateChangeStudy,TheCosttoDevelopingCountriesofAdaptingtoClimateChange,2019:https://documents.worldbank.org/en/publication/documents-reports/documentdetail/667701468177537886/the-costs-to-developing-countries-of-adapting-to-climate-change-new-methods-and-estimates-the-global-report-of-the-economics-of-adaptation-to-climate-chang;ChannelNewsAsia,NDR,ItCouldCost$100BilliontoProtectSingaporeAgainstRisingSeaLevels,2019;BCGAnalysis12AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction2.2Mitigatingtherateofchange2.3AsingleapproachwillyieldgreatopportunitiesWhileadaptationisimportant,itisalsocrucialtoslowandultimatelyreducetherateofglobaltemperaturerises.Climatemitigationisabetter-understoodstrategy,basedontacklingglobalissuesthroughworldwidecoordinationandaction.Climatemitigationfocusesprimarilyoninvestingindecarbonization,slowingGHGemissionsandremovingexistingGHGsfromtheatmosphere.Asiaisexpectedtoleadthewaywhenitcomestocleanenergyinvestmentactivityoverthenextdecade,withopportunitiestoincreasethesmallinstallationbasesofbothsolarandwindinfrastructure(Figure9).Investmentinenergyinfrastructurewillbeneededinmostcountries,aswellasinbuildingprojectstooffsettherapidexpansionofurbanliving,intransporttoassistinthegrowthinpopulationmobilityandeveninagricultureandforestryincountrieswithbigfarmingindustries.Energyleadskeymitigationcosts,butinvestmentisneededinavarietyofareasFIGURE9Malaysia227119912ChinaIndiaIndonesiaEnergyIndustryAgri/forestryOthers1BuildingTransport48.0%2.0%50.0%32.0%32.0%5.0%4.0%25.0%37.0%5.0%2.0%5.0%49.0%70.0%1.0%29.0%3.0%2.0%Manyadaptationandmitigationoptionscanhelpaddressclimatechange,butnosingleoptionissufficientbyitself.Effectiveimplementationneedsintegratedresponsesthatlinkmitigationandadaptation.IntergovernmentalPanelonClimateChangeItisnotpossibletoadaptwithoutmitigationortomitigateclimatechangewithoutadaptation.Thetwostrategiesmustbepursuedsimultaneously–andsoon.Yetitisimportanttorecognizethattheseactivitieswillrequiresignificantinvestmentbynationsandbusinesses,bothintermsofcapitalinvestmentandofopportunitycost.Forexample,countrieswillneedtobalancefundingforclimateactionalongsidecompetingagendasandnationalprioritiessuchasbiginfrastructureprojects,transportprogrammesorevensocialcampaigns.Itwouldbeamistaketoconsiderclimateadaptationandmitigationonlythroughacostlens,however.Newopportunities,revenuestreamsandjobswillemergeasindustriesevolvetodealwithchangingenvironmentalfocuses.Inaddition,themovefromcarbon-intensivepracticestomoreefficientwaysofworkingwillseeavaluetransitioninarangeofkeyindustries(Figure10).1Coversmiscellaneoussourcessuchasfewerfugitiveemissionsfrommining,lesslandfilling,etc.Source:Burchardt,Jens,TheEconomicCaseforCombatingClimateChange,BCG,27September2018:https://www.bcg.com/publications/2018/economic-case-combating-climate-change;BCGanalysisAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction13Theevolutionofindustrieswillseeavalueshifttowardslow-carbonpracticesAdaptationandmitigationwillspuraboominclimaterevenuesandnewjobs:thetop10opportunitiesinAsiaFIGURE10FIGURE11LosingvalueFossilfuelextractionandgenerationICEmanufacturingandservicingLow-EEandlow-resiliencebuildersLow-EEandlow-resilienceproducersLow-resilienceagriculture,smallholdersRenewablesmanufactureandgenerationEVmanufacturing,infrastructureandmobilityservicesRetrofittinglow-EEstock,high-EEbuildersHigh-EEandhigh-resilienceproducersHigh-resilienceagriculture,largeproducersEnergyTransportConstructionIndustryAgricultureGainingvalue177Sizeofbusinessopportunityin2030$billions,12019valuesFood,landandoceanuseInfrastructureandbuiltenvironmentEnergyandextractivesBusinessopportunityExpansionofnature-positiverenewables3212752652582332101981641622,26117,8537,30321,12829,5224,71324,5287,8724,74715,291542133,499Circulareconomy–automotiveEnergyefficiencyinbuildingsOrganicfoodandbeveragesReducingfoodlossandwasteinthevaluechainDiversifiedvegetablesandfruitsWastemanagementCirculareconomy–appliancesReducingconsumerfoodwasteResourcerecoveryTop10opportunitiesSizeofincrementalannualopportunityinAPAC2030:$billions1TotalAPACjobsby2030:1,000sTherearealreadysignificantopportunitiesforbusinessesinvolvedinadaptationandmitigation.Considertheincrementalrevenueopportunitythatcouldbeavailableby2030fromactivitiessuchastheexpansionofrenewablepower,energyefficiencyinbuildingsandgreatercircularityinproducingindustries.Thetotalopportunityisenormous,withrevenuesofapproximately$4.3trillionavailableforAsianbusinessestoclaim–representinga43%shareofthetotalglobalopportunity(Figure11).Thestoryisthesamewhenconsideringjobgrowth.Morethanhalf(58%)ofthe395millionnewjobspredictedtoberequiredtoservicenewrevenueopportunitieswillbesituatedinAsiaacrossfood,landandoceanindustries,infrastructureandthebuiltenvironment,andenergyandextractives.241Basedonestimatedsavingsorprojectmarketsizingineacharea.Theserepresentrevenueopportunitiesthatareincrementaltobusiness-as-usualscenarios.Whereavailable,therangeisestimatedbasedonanalysisofmultiplesourcesSource:Literaturereview;marketresearch;expertinterviews;Temasek,theWorldEconomicForumandAlphaBeta,NewNatureEconomy:Asia’sNextWave:Risks,OpportunitiesandFinancingforaNature-PositiveEconomy,September2021:https://www.ecosperity.sg/content/dam/ecosperity-aem/en/reports/new-nature-economy-asia-low-res-pages.pdfNote:ICE=internalcombustionengine;EE=energyefficiency;EV=electricvehicleSource:BCGanalysisAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction142.4EnergizingajusttransitionTheenergytransitionisacriticalfocusofbothadaptationandmitigationstrategies.butitbringswithitsignificantongoingchallenges.Onlythroughamovetorenewableenergysourcescantheworldmeetthenet-zerochallenge.Yetincreasingtheshareofrenewableandenvironmentallysoundenergyistakingtime.Asiahastobalancethetransformationofitsenergymixwiththeabilitytoprovidesecure,affordableenergytogrowingeconomies–aso-called“justtransition”.Ajusttransitionisvitaltoaddressbothmitigationandadaptationthroughfairandinclusiveaction,ensuringthatnocommunityisleftbehindandinspiringessentialbuy-infromnationsandcitizensatdifferentlevelsofthesocioeconomicspectrumaroundtheworld.Agrowingregionneedsenergy.Infact,Asiarepresentsalmosttwo-thirdsofprojectedgrowthinglobalenergydemand,takingintoaccountIndia(26%),China(22%)andSouth-EastAsia(12%).25Itisconcerningthatdemandislikelytobelargelymadeupoffossilfuelsinthenearterm.Asiaisexpectedtoseeanincreaseinenergydemandof18%by2030accordingtotheInternationalEnergyAgency’sStatedPolicyScenarios,agranular,sector-by-sectorlookatexistingenergypoliciesandmeasuresaswellasthosethatareunderdevelopment.Yetevenfullyimplementingcurrentpolicieswillseeanincreaseofonly5%forrenewables’shareoftheenergymix,farbelowthe12%increaserequiredtoachievekeydevelopmenttargets(Figure12).AsiamustincreasetheproportionofrenewablesinitsenergymixFIGURE12StatedpolicyscenarioSustainabledevelopmentscenarioAPregion’senergymix(%oftotalenergysupply)APregion’senergymix(%oftotalenergysupply)RenewablesTraditionaluseofbiomassNuclearNaturalgasOilCoal202020302050202020302050259,217306,551335,443259,217276,060264,97947.7%41.1%24.5%12.5%15.0%26.2%10.0%4.4%11.4%23.8%47.7%35.1%23.3%14.3%5.1%22.1%55.3%9.3%11.7%12.5%11.2%6.1%14.8%22.2%29.5%23.8%11.4%10.0%4.4%2.8%2.6%4.2%1.1%2.8%18%9%Makingthetransitiontorenewableswillrequirefocusandconsciousaction.ToachievetheIEA’sSustainableDevelopmentScenariogoals,globalcoalemissionsmustdropby88%–ofwhich88%mustcomefromAsia–andoilemissionsby65%–with20%ofthereductionscomingfromAsia.RenewablesareonthebrinkofbecominganaffordableoptioninAsia,buttheyhavenotyetovertakenthecost-competitivenessoffossilfuels.Historically,therehasbeenapremiumofmorethan25%onrenewablesincountriessuchasIndonesia,JapanandMalaysia.Yetovertimepricedifferenceswillshrink,withrenewablespredictedtobecome23%cheaperthanfossilfuelsby2030.26Significantnet-zeropledgesbyinfluentialnationssuchasMalaysia,IndonesiaandThailandwillfurtherspurthisjourney.Source:IEA,WorldEnergyOutlook2021;BCGanalysisAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction15State-ownedenterprises(SOEs)willplayamajorroleindeliveringthischangeinSouth-EastAsia.IndonesianoilandgasoperatorPertaminaisanSOEthatisexploringmoreclimate-friendlyoperatingpracticestodrivesustainablegrowthandmitigatetheenvironmentalimpactsofitsoperations.Thisreflectsawiderregionaltrendforsomeenergyplayersseekingtomitigatetheirimpactontheclimatewhilealsorespondingtoevolvingregulatory,consumerandinvestorexpectations.Pertaminahasdevelopedacomprehensivesustainablestrategythatencompassestenkeyareasofsustainabilityfocus.ThestrategyoutlinesPertamina’scommitmenttosustainabledevelopmentandhighlightstheimportanceofreducingGHGs,promotingbiodiversity,acceleratingnewandrenewableenergycapacity,andfosteringsocialresponsibilityandcorporateethics.Tofurtherunderscoreitscommitmenttosustainability,PertaminahasestablishedadedicatedSustainabilityCommitteetooverseeitssustainabilitypoliciesandprogrammes.Thecommitteecomprisesseniorexecutivesresponsibleforsettingandmonitoringthecompany’ssustainabilitytargets,aswellasoverseeingtheimplementationofthesustainabilitypolicy.Atthecorporatelevel,in2022Pertaminamadeaconcertedefforttoembedsustainablepracticesintothecoreofitsoperationsthroughtheadoptionof16environmental,socialandgovernance(ESG)initiativesandaroadmaptowardsitsgoalofachievingnet-zeroemissionsby2060.Pertamina’sNetZeroRoadmapconsistoftwopillars.Thefirstisthedecarbonizationofbusinessthroughenergyefficiency,greenpowergeneration,lossreductionandtheuseoflow-orzero-carbonfuelinfleets.Thesecondpillarisnewgreenbusinessbuilding,throughactivelyinvestingindiversifyingoperationstoincludenewgreenenergyopportunitiessuchasbiofuels,large-scalerenewables,electricvehicle(EV)chargingandswapping,blueandgreenhydrogen,nature-basedsolutions,carboncapture,utilizationandstorage(CCUS),carbonoffsettingandcarbonmarketbusiness.TheseeffortscontributedtoPertamina’sESGriskratingfromtheSustainalyticsInstituteimprovingfrom46.1to22.1,placingitsecondgloballyintheIntegratedOilandGassubcategoryandimprovingitsCDPClimateScorefromDtoBin2022.Bytheendof2022,PertaminahadreduceditsproductionofCO2eGHGsbyaround7.9millionmetrictonsof(areductionofover31%)basedonits2010baseline.Someregionsarealreadyreapingtherewardsofchampioningsustainabletransitions(Figure13).WhilepolicyandregulationhavedrivenupthecostofsolarandwindinIndonesia,ifthoserestraintsfelltotheglobalaverage,thelevelizedcostofelectricity(LCOE)ofsolarwouldbearound40%lowerthanfossilfuels.27Thisisjustoneexampleofhowawell-managed,justtransitioncanhelpshieldAsiafromenergyvolatility–aswellasboostdecarbonization.MalaysianSOETenagaNasionalBerhad(TNB)hasalsosetobjectivestotransformthenationalenergyoutlookthroughacceleratingitssustainabletransitionjourney.Ithascommittedtoexpandingrenewableenergycapacityasashareofitstotalenergymixfrom14%to66%by2035aspartofitsnet-zerovision.ThiswillformacriticalcontributiontoMalaysia’sRenewableEnergyRoadmap,whichaimstohaverenewableenergyform40%ofgenerationcapacitybythesameyear.Awell-managedjusttransitioncanhelpshieldAsiafromenergyvolatility–aswellasboostingdecarbonization.AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction16ThevastscaleoftheenergytransitionpromisesgreatbenefitsFIGURE13ConventionalRenewablesTotalinstalledcapacity(GW)XX–Newclimatetarget,reliableandambitious5-yearREplans;limitedJVswithinternationalplayers–MarketremainsrelativelyclosedandregulatedwithverycompetitivelocalCAPEXbusinessandseveralregionalcomplexities–10thBasicPlantargetswitchesgeartoprioritizenuclearoverREfollowingthechangeofgovernment–ProgressivedevelopmentofhydrogenandhybridplantswithhighinvestmentcreatingbusinessopportunitiesforinternationalplayersSouthKorea202220302,5653,80455%43%45%57%2022203014115981%73%19%27%–GrowthinREprimarilydrivenbysolar(aspartofthePowerDevelopmentPlan2020)–Issuedregulationstooffer5GWRenewablePPAFiTschemeviaauctionsin2022–2030–2ndroundofrenewableenergyauctionwilloffer11GWREover2023–2026,primarilysolar,windandbiomass–Potentialformini-hydro,governmentpushtoattractforeigninvestors;connectionswithlocalteamsneededtomanagesocio-environmentalconcernsPhilippines20222030586979%74%21%26%20222030292474%65%26%35%–Long-termgrowthexpectedinsolarandoffshorewinddrivenbyeconomicgrowthdespiteshort-termpolicyuncertainty(delayofPDP8)–RisingroleofLNGinensuringenergysecurityforVietNam–Gridcapacityandconnectionissuesremainadeterrent–Retirementoflargeconventional(coal)plantsdrivinginvestmentinlow-costlarge-scalewindandsolarplants–Stategovernmentsprovidinglong-termcontractsthroughreverseauctionsinordertomeetstate-levelrenewableenergytargets–SettingupofhydrogenhubtoanticipategrowingdemandsfromJapan,SouthKoreaandTaiwanAustralia202220307912443%50%57%50%202220301029955%44%45%56%–Increasingpushbygovernment.toincreaseREshareingenerationmixto20%by2025(from<5%in2020)andevenextendto~40–50%by2030throughnewNEPFocusonsolarthroughLargeScaleSolar(LSS)programme–anattractivepropositionforinternationalplayers–PromisinggreenhydrogenpropositioninSarawakChinaThailandVietNamMalaysia–SubsidedcoalinIndonesiapushedREagendaonback-foot–SolarcouldbethemostcompetitiveRE(especiallyinremoteareas),butplentyofchallengesIndonesia20222030394677%69%23%31%20222030819585%82%15%18%TNBengagedastructuredtransitionprocesstosetsustainabilityasacorepartofitsbusiness.Itintegratedclimateactionintoitscorporategovernancestrategyandaligneditsorganizationalstructure,introducingsustainabilitydisclosureandreporting,andsettingasidecapitalcommittedtoinvestingingreeninnovation(Figure14).Toassessitsprogresstowardsnet-zerooperationsby2050,TNBinitiatedassessmentofemissionsacrossScope1and2,withfurtherassessmentofScope328value-chainemissionsasitworkstowardsachievingScienceBasedTargetsInitiative(SBTi)accreditation.29Ithasidentifiedleverstoachievefulldecarbonizationwithinitsexistingvaluechain,withaccompanyinggrowthimpactanalysis,includingtransitiontosolarandhydroelectricproduction,windpowerandgreenhydrogeninenergygeneration.TNBhasinvestedheavilyinglobalrenewableenergybusinessesthroughitsTNBRenewablessubsidiarytobothexpanditsgeneratingfootprintandtospurknowledgetransfer.Itisalsoinvestinginsmartandautomatedgridanddistributiontechnologiestoachieveefficiencyanddemandsavings,andintroducingnewproductsandservicesenabledbydigitalizationinenergyretail.Itisfurtherinvestinginvaluechainexpansion,includingEVcharginginfrastructureande-mobilityservices.Note:RE=renewableenergy;JVs=jointventures;LNG=liquefiednaturalgasSource:IRENA;industryreports;desktopresearch;BCGcaseexperience;BCGanalysisAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction17AplannedsustainabilityroadmapforTenagaNasionalBerhadFIGURE142016–2019Sustainabilityatthecore–EstablishedSustainabilityDevelopmentCommittee(SDC)andpublishedfirstsustainabilityreport–Commencedcarbonfootprintassessment–SustainabilityreportinganddisclosureaccordingtointernationalstandardsEnablingthechange:–EstablishedoftheTNBGreenEnergyDevelopmentFund–Greeninnovation–launchedentitytopromoteself-generationfromsolarenergy2020–2022Setnet-zerotargetsanddevelopedcomprehensiveclimatepathwaystoachievenetzeroby2050–AnalysedkeyimplicationsofexistingESGplansandcurrentperformance–Modelledlong-termscenariosandsignpoststoevaluateclimateimplications–Definedthe2050visionacrossvaluechaintodevelopfuturebusinesscaseLeverstoaddressfulldecarbonizationandgrowthimpact:–Fundingthejourney,i.e.integratedfinancialmodelandfinancingoptionsbyassetclass–Assessedgovernanceandorganizationalmodel,processes(e.g.internalcarbonprice)todeliveronoutcomes2022+Strategizecollaborationacrossvaluechain–Powergeneration:nationalenergymodellingusingPLEXOS;asset-levelfleetdecarbonization–Gridanddistributionnetwork:variablerenewableenergy(VRE);electrification;distributedenergyresources–Powerretail:decarbonizationimpact;“BeyondkWh”opportunitiesreinforcedbydigitalizationDrivenewgreenbusinesses:–Builddomesticandinternationallarge-scalerenewables(e.g.solar,wind,hydro)–Setupnewgreentechnologies,e.g.combinedcyclegasturbines(CCGTs)withCCUS;CCGTswithgreenH2;nuclearsmallmodularreactor(SMR)–DevelopmentofgreenH2hubTherearecomplexitiesthatcomealongwiththedeliveryofajusttransition,andthesemustbemanagedcarefullytoensurethatnecessarytransformationtakesplacewithoutnegativelyaffectingthemostvulnerablecommunities.South-EastAsiafacesmanychallengesinthisregard,withwideregionalsocioeconomicstratification,diversecommunities,geographicalbarriersandrapidgrowthreliantonhigh-intensityindustries(Figure15).Effortsmustbecarefullyfocusedonmanagingjobredistribution,asrolesintraditionallegacysectorssuchasoilandgasandminingarebeingdisrupted.Thisnotonlytriggerstheneedforappropriatejobtransitionsupportbutalsohasmajorrepercussionsforstaterevenueandtheconsequentinvestmentcapabilitiesofgovernments.Miningandcoalalonecontributedanestimated5%ofIndonesia’stotalGDPin2019.30Protectingat-riskgroupsandcommunitiesisanothercriticalchallenge,witheffortstocompensateorredistributeopportunitiesforvulnerablecommunities.Mining,forexample,oftentakesplaceinruralareaswhereitrepresentsasignificantshareofsocioeconomicopportunities.Ajusttransitionmustincluderelevantsupportforthepoorest40%ofcommunities,whicharealsosufferingfromrisingcostsandlossesasaresultofclimatechangeimpacts,andmitigationandadaptationefforts.Thiscanincludededicatedfinancialaidandinvestmentinadaptationthattakethisintoaccount.Fundingthetransitionitselfremainsakeychallenge,withonly30%ofannualclimatefundingthusfarchannelledintoemerginganddevelopingmarkets.AlandmarkagreementattheCOP27climatesummittoestablishahistoriclossanddamagefundofferspositivemovementinthisdirection.ManagingtheimpactonnaturalsystemswillformafurtherelementofajusttransitioninSouth-EastAsia–aregionofrichbiodiversitythatisintrinsicallylinkedtothewell-beingoflocalcommunities.Analysisrevealsthatprotectingthismarineandterrestrialbiodiversitycoulddeliverbenefitsof$2.19trillion31ayearthroughjobcreationandnature-linkedsocioeconomicopportunities.Source:TenagaNasionalBerhadsustainabilityreportsAjusttransitionmustincludesupportforthepoorest40%ofcommunities,whicharealsosufferingfromrisingcostsandlossesasaresultofclimatechangeimpacts.18AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateActionSomeofthecomplexitiesofajusttransitionFIGURE15AfforestationforcarboncreditsReducefossilfuelsAllocateclimatefundingCO2taxtoraiseclimatefundsPricesrise,affectinglow-incomecommunitiesGovernmentBusinessCommunityAdapttorisingsealevelsGovernmentWorkersSeawallsbuilttoprotectagainstsea-levelrisehaveanadverseimpactonthemarineecosystemTemporaryjobcreationforseawallandlandreclamationprojectsproducechangesinmarineecosystemthataffectlivelihoodoffishingcommunityConstructahydropowerplantAgriculturallandconvertedtoforestforcarboncreditsprojectLossofagriculturaljobsUpskillingorreskillingrequiredforfarmersConstructionofhydropowerplantforcleanenergyNewjobsandinvestmentIncreasedfloodingriskLossofbiodiversityasaresultoffloodingImpactonlivelihoodsfromwatercontaminationanddeclineinfisheriesReductioninagriculturalexportsandassociatedtaxrevenuesAbletobuyoffsetstohelpmeetnon-zerotargetsSafeguardinglocalcommunitiesandbusinessesleadstohighertaxburdentofundseawallconstructionLossofjobsfromcoalphase-outmitigatedbyimplementingsolarSolarleadstodeforestationDeforestationaffectslivelihoodsandremovescarbonsinkLesspollutionandfewercarbonemissionsSolarjobsboosteconomyBusinessCommunityCommunityWorkersCommunityCommunityBusinessWorkersWorkersNationandgovernmentCO2Source:BCGanalysisAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction19Thecorporateclimateframework3Corporateentitiesareresponsibleforanoverwhelmingproportionofglobalemissions,soit’sessentialforbusinessestoacceleratetheirclimateactionefforts.However,non-strategic,piecemealsolutionswillnotleadtothetypeorscaleofchangerequired.Acorporateclimateactionframeworkoutlinestheactionsleaderscantakeimmediatelyandinthemid-term,aswellasactionstoenablelong-termgrowththroughclimateaction.Thesestepsdon’thavetobeexecutedinsequence–infact,companiesidentifiedaspioneersofthebestpracticeshaveofteninvestedindifferentleversinparallel(Figure16).ThecorporateclimateactionframeworkFIGURE16TakeimmediateactionsEnabletransformationUnlocknewgrowthABC1MakeclimateactionaCEOpriority–Groundyourclimateambitioninthecompany’spurpose,demonstratingcoherencetoallstakeholders2Understandclimaterisks–andopportunities–Understandyourclimaterisksandplananadaptionprogrammeinlinewithcompanystrategy3Setcleardecarbonizationtargetsandspecifymilestones–BaselineyourhistoricandfutureemissionsacrossthevaluechainusingdataandAI-enabledenterprisetechnology–Setyourambitionandemissions-reductiontargetsonallscopes4Implementcost-efficientsolutionstotackleemissions–Identifyandsizeemissions-reductionlevers–Deployleversatscale8DevelopnewcapabilitiesFosternewcapabilitiesinadjacentbusinessesandenternewgreenmarkets–Downstreamexpansion:includelow-emission,value-addbusinessestoyourendsegments7ExpandexistingvaluechainsAcquirenewcapabilitiestoreducecarbonfootprintofexistingvaluechains–Technology:undertakeearlyadoptionofhigh-impacttech(CCU,H2,BECCS,etc.)–Digital:unlockfullpotentialofdigitalIoTandAIsolutions6AcceleratecollaborationacrossthebusinessenvironmentBeyondindividualactions,accelerateecosystemcollaboration–BringscaletoaddressexternalbarriersandfostercollaborationtotackleScope3emissions–Spreadshort-termdisadvantagesfromstill-unclearbusinesscasesandbearrisksofdevelopingunproventechnologies5Mobilizeorganizationandresources–Anchorclimateactionincorporategovernanceandstrategy–Commitandprioritizecompanyresourcestodeliveragainstambitionandtargets–Engage,discloseandcommunicateclimateactionSource:BCGandSAPAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction203.1Whattodofirst:immediateactions1MakeclimateactionaCEOpriorityThefirstactionfororganizationstotakeisthemostfundamental.Environmentalandsustainabilitygoalsmustbecomeafoundationalpartofthebusinessand,assuch,mustbeinherentlygroundedinanorganization’spurposeandledbytheCEO.That’snotassimpleaschangingthewordsinastatedmissionorpurpose,butitrequiresclear,coherentandconsistentcommunicationofclimateambitionthroughtopmanagement,externalstatementsandinternalstrategiesandpolicies.2Understandclimaterisks–andopportunitiesIt’saclichébutnonethelesstruethatbusinessescanmanageonlywhattheycanmeasure.Organizationsmustunderstandthescopeandscaleoftheirclimaterisksandopportunitiesbeforeplanningtheiradaptationandmitigationprogrammesinlinewiththeircompanystrategy.Todothis,businessesshouldpulldatafromawidearrayofsources,includingproprietaryandpublicsources,anduseittoprepareavarietyofplans.It’scriticaltorecognizethatnoscenarioiscertain,sorunningsimulationsandstress-testinghypothesesformultipledifferentfuturesisnecessary,asisprioritizingrisksbasedonclimateexposureandrankingkeyopportunitiesforaction.Theseclimatestrategiesshouldbeopenlyandwidelycommunicatedtostakeholders.3SetcleardecarbonizationtargetsandspecifymilestonesWhateveranorganization’sclimateactionmaturity,itshouldbeclearlysettingandmeasuringtargetsandmilestonesfordecarbonizationbasedonbothitsuniquecircumstancesandindustrystandards.BaselininghistoricandfutureemissionsacrossthevaluechaincanbeachievedbyusingdataandAI-enabledenterprisetechnology.Fororganizationsjuststartingoutonthisjourney,itcouldbeassimpleasbeginningtomeasureemissionsatahighlevel,aswellassettingalong-termambitionalignedtopeersorashort-termtargetwithlimitedscope.Asmaturityincreases,organizationscanincreasetheaccuracy,granularityandexhaustivenessofmeasurementacrossScopes1and2andpartofScope3.Targetscanbeincreasedinlinewiththisdevelopment,andambitionsalignedtoscience-basedtargets(SBT).Best-practiceorganizationsshouldbetargetingfullcarbonaccountingacrosstheirbusinesses–andusingthedatatoinformtheirdecision-making.Long-termambitionsshouldaligntoanSBTof1.5°C,includeadetailedroadmaptoachievethatambitionandincludeemissionsacrosstheirfullvaluechain(Figure17).SingTel’sclimateactionevolutionFIGURE17FY2015ClimatechangeidentifiedinSingtelGroup’sstakeholderengagementandmaterialityreviewFY2016Life-cycleassessment(LCA)performedtoadviseonmaterialenvironmentalissuesincompany'sextendedvaluechainFY2018FirstcompanyinAsia(ex-Japan)tocommitandhavecarbonreductiontargetsapprovedbySBTiFY2020OnlySEAcompanythatcommittedtoBusinessAmbition1.5°CCampaignandnet-zeroemissionsby2050Source:SingTelAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction214Implementcost-efficientsolutionstotackleemissionsOnceastrategyisinplace,it’stimetoputthedataandinsightstouse.Businessescanidentifyemissions-reductionopportunitiesandbegintoimplementthem.Startwith“low-hangingfruit”andplannextstepsandlonger-termleversthatrequiretechnologicalorbusiness-modelchange.Byclassifyingandprioritizingsolutionsbasedoncompetitiveadvantage,suchasreducingcostsordifferentiatingproducts,businessescanfocusongettingthebiggestreturnoninvestment.Leverscanthenbedeployedatscale.ExamplesofbestpracticesincludeinfrastructurecompanyKeppelLandsaving$383,000perannumthroughgreenandeco-designtechnologies,orBangchakCorporationrealizinganadditional$26millionofEBITDA(earningsbeforeinterest,taxes,depreciationandamortization)throughnewbiofuelproducts.3.2Whatgoodlookslike:ZuelligPharmadrivesimpactthroughtransparenttargetsThemissionofZuelligPharma,oneofthelargesthealthcareservicesgroupsinAsia,istomakehealthcaremoreaccessibletothecommunitiesitserves.Itprovidesworld-classdistribution,digitalandcommercialservicestosupportthegrowinghealthcareneedsintheregion.Thecompany,whichwasstarted100yearsago,hasgrowntobecomea$15billion-plusbusinesscovering16marketswithmorethan13,000employees,servingmorethan350,000medicalfacilitiesandworkingwith500+clients,includingthetop20pharmaceuticalcompaniesintheworld.ZuelligPharma’sdecarbonizationjourneyisfoundedontransparencyandexternalvalidation.Itsgeneraldisclosureandkeysustainabilitymetrics,includingitsGHGemissionsdata,areverifiedbyBureauVeritas.ReducingitsenvironmentalimpactisasignificantpartofZuelligPharma’smissionasitseekstosecurethewell-beingoffuturegenerations.Mitigatingclimatechangeiskeytothatoverarchingeffort.First,thebusinessclearlyaligneditspurposewithclimateaction,workingontwinambitionstomakehealthcaremoreaffordablewhilebecomingasustainableorganization.Asakeyplayerinthepharmaceuticalsupplychain,ZuelligPharmarecognizesitspotentialtoplayasignificantroleinaddressingtheclimatecrisisthroughdecisiveaction.ItiscommittedtoreducingitsGHGemissionsandincreasingitsenergyefficiency.Toholditselfaccountable,itcommittedtotheScienceBasedTargetsinitiative(SBTi)in2021andworkedwithanexternalconsultanttosetscience-basedtargetsalignedtoa1.5°Cscenario,aswellastodevelopacarbon-reductionroadmap.Itsnear-termtargetswerevalidatedbytheSBTiin2022.ThesetargetsincludereducingitsScope1and2emissionsby42%anditsScope3emissionsby25%fromthebaseyearof2020.Inaddition,ZuelligPharmaaimsforitsownoperationstobecarbonneutralby2030andhasalsocommittedtoobtain30%ofitsenergyfromon-siterenewableresourcesbythesameyear.Whileoffsetsmightbenecessarytoachievethesetargets,thecompany’sprimaryfocusisonreducingitsemissions.Ithasmappedoutandwillbelookingatfurtheropportunitiestoreduceitsenergyconsumption,improveitsenergyefficiency,increasetheuseofrenewableenergyandworkwithitssupplierstoreduceitsmaterialvaluechainemissions.Thecompany’sapproachisbasedonagranularunderstandingofitsemissionsandaneight-yearcarbonreductioninvestmentplanbuiltaroundselectedinitiativeswiththesupportofexternalconsultants.ZuelligPharmanextinvestedinunderstandingitsclimateimpact.AspartofitsGHGassessment,ithasscreenedallScope3categorieslistedbytheGHGProtocoltoidentifythoserelevanttoitsactivities,withbothupstreamanddownstreamemissionsbeingtracked.Itwasabletoidentifythat65%ofitstotalemissionscamefromupstreamtransportationanddistribution,whileAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction22ZuelligPharmaisreapingtherewardsofclimateactionFIGURE18GHGemissions(tCO2e)7%242,791226,14220202021Source:ZuelligPharmasustainabilityreportmorethan80%ofitsenergyconsumptioncamefromelectricityuseinitsfacilities.Italsoidentifiedcommutingasanotheropportunity,generating8%oftotalemissions.Thisdataisbeingusedtodrivetargetedincrementalimprovements.Afewexamplesinclude:movingmostofitsregionalservicesfromon-premisehostingtocloud-basedMicrosoftAzuredatacentres,whichisupto93%moreenergyefficientandupto98%morecarbonefficientthanon-premisessolutions;openingitsfirstLEED(LeadershipinEnergyandEnvironmentDesign)-certifiedwarehouse,suppliedby10,000squaremetresofsolarpanels;andpilotinganexclusivelysolar-poweredtransportationfleetestimatedtobeabletogeneratemorethan1.5mkWh(millionkilowatt-hours)ofcleanenergyperyear,equivalentto1,156metrictonsofCO2and375,000litresofdieselsaved,ifscaledupnationwide.Thepositiveresultshavebeenclear.ZuelligPharmahasreporteda7%reductioninoverallcarbonemissions,including4millionkWhofenergysavings(Figure18).Morethan5%ofitsenergyisnowsourcedfromcertifiedrenewablesources,providingareductionof14.7millionmetrictonsofemissions.Therewasa75%increaseinrenewableenergyuse,poweringoperationsinTaiwan,Vietnam,MalaysiaandthePhilippineswithself-generatedsolar-power,andtherewasa20%reductioninwaste,with551metrictonsattributedtorecyclingprogrammes.Theseachievementsarebeingrecognizedbythecommunity.ZuelligPharmafirstreceivedaGoldcertificationfromsustainabilityratingsspecialistEcoVadisin2021foritsfocusonsustainabilitymanagement.ItthenreceivedanEcoVadisPlatinumawardin2021andagainin2022,placingitinthetop1%ofallassessedcompaniesworldwide.AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction233.3Enablingtransformationinthemediumterm5MobilizeorganizationandresourcesThenextsteptowardsclimateactionmaturityistoembedsustainabilitythroughouttheorganization,fromthetopdown.Thisdemandsasystemicapproach.Ataleadershiplevel,organizationsmustanchortheirclimateactionstrategyincorporategovernance.Steeringcommitteesforsustainabilityshouldadvisetheboardandexecutivecommitteetoensurethatclimateisembeddedinstrategicdecision-making.Actionssuchassettinginternalcarbonprices,includingclimateriskinnewbusinesscasesandcommunicatingclimatetargetsandmilestonesarecritical.AtGoTo,oursustainabilityfunctionservesasacrucialpartofcompany-wideriskmanagementanddecision-making.ThisbuildsGoTo’sinstitutionalcapacitytounderstandwhatismaterialtoeachbusinessline,whataretheshiftsneededtocrediblyrespondandhowitcontributestoeachThreeZeroby2030roadmap.ThisensuressustainabilityistrulyintegratedintoeachandeveryteaminGoTo,andhelpstheentirecompanycollectivelyworktowardsthesamegoals.TanaSullivan,ChiefSustainabilityOfficer,GoToGroupSembcorpembedsclimateactionintogovernanceBOX2Singapore’sSembcorpprovidesagoodexampleofembeddingclimateintogovernance,creatingsustainabilityandclimatechangecommitteesreportingtotheboard,andsettingESGperformanceincentivesforseniorexecutives.Theorganizationusesrisk-basedscenarioanalysisininvestmentdecisionsandismovingtoachievereducedemissionsbytransformingitsportfoliofromfossilfuelstogreenenergy,andgrowingrenewablecapacity.Butactionwithoutinvestmentisdoomedtofail.Organizationsmustcommitandprioritizecompanyresourcestodeliveragainstclimatetargets.Thatmeansnotonlysecuringfundsbutalsoaligningtargetstoperformance,allocatingmoneytotrainingandidentifyingandpromotingcorecentresofexpertise(Figure19).IndoramaVentures,aglobalchemicalcompanyheadquarteredinThailand,issuedaTHB10billion($262million)triple-tranchesustainability-linkedbond(SLB)in2021,alignedwithinternationallyacceptedstandardsincludingthoseoftheInternationalCapitalMarketsAssociationandtheLoanMarketAssociation.TheSLBislinkedtoanindependentlyverifiedassessmentofIndoramaVentures’performanceinreducingGHGemissions-intensityby10%by2025(froma2020base),32increasingrecyclingofcertainplasticinputsto750,000metrictonsperyearby2025,andachieving25%renewableelectricityconsumptionby2030.24AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateActionSecuringfinancialandorganizationalclimateresourcesClimateactionrequirescollaborationacrossthesystemFIGURE19FIGURE2001FundingSafeguarddedicatedbudgets04ExpertiseSetupclimatecentresofexpertisetodesignpoliciesandsupportscale-up02ManagementobjectivesClimatetargetsembeddedinperformancemanagement03TalentcontributionTrainteamstoclarifystakesandindividualcontributionsSuppliersAddressScope3–Includeclimateactioninsupplierevaluation–Pushfordisclosure(especiallydetailedbaseline)–Supporttheirdecarbonizationjourney(e.g.co-development,expertise-sharing…)RegulatorAdvocatesectoralneeds–Beexplicitonpolicychangesneededtocreatealevelplayingfield–ProvidetransparencyonconsequencesofinsufficientchangesCompetitorsCollaborateonclimate–Developsectormethodologiesandmetrics–Implementsimultaneously“first-moverdisadvantage”levers–ScaleabatementtechnologiesInvestorsCollaborateonclimate–Showcaseclimateactionasvalue-creationdriver–Disclosedecarbonizationtargets,actions,progressandbarriersCustomersEnlistinclimatejourney–Educatethroughcommunicationcampaigns–Pushfordisclosure(especiallydetailedbaseline)–Supporttheirdecarbonizationjourney(e.g.co-development,expertise-sharing…)InternationalorganizationsFacilitatebroadermobilization–Learnfromthebest-in-class–Getexpertiseonspecificlevers(e.g.NCS)Thoseprinciplesandprogrammeshavetobeclearlyandconsistentlycommunicatedtomajorinternalandexternalstakeholders.Climateactioncommunicationcanbeatrickysubject,withaccusationsofgreenwashingrife.Climatecommunicationmustfirstandforemostbecredible–supportedbytangibleaction,feasibletargetsandverifiedresultsandplans.Butitmustalsobeconsistentandcomprehensive,tailoredtoanorganization’sbusinessandinspiringenoughtoexpresswhytheactionstakenshouldmatter.Andtheactionsmustbefocusedoncorrallingdecision-makersandstakeholdersaroundasingularambition.6AcceleratecollaborationacrossthebusinessenvironmentClimateactioncannotbetakenalone.Organizationalresponsestoclimatemustgobeyondindividualaction;theyshouldservenotjusttoacceleratebusinessbutalsoleadtocollaborationacrossthebusinessenvironment(Figure20).Businessesmustunderstandtheclimateimpactofboththeirupstreamanddownstreamstakeholders,fromsuppliers,customersandcompetitorstoregulatorsandinvestors.Source:BCGandSAPSource:BCGandSAPAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction25更多报告请关注公众号：全球行业报告库SATSdrivesacorecommitmenttosustainabilityBOX3SingaporeanaviationservicescompanySATSisusingitspositioninacarbon-intensivebusinessenvironmenttodriveacorecommitmenttosustainability.Theorganizationhasfocusedoncreatingaresilientsupplychainbyincludingenvironmentalcriteriainitssuppliercodeofconduct,andmeasuringsupplierESGperformance.IthasalsorunsustainabilitytrainingforitscustomersandreducedplasticconsumptionforeverySingaporeAirlinescustomerby80%.3.4Whatgoodlookslike:CityDevelopmentsLimitedinveststoaddressemissionsacrossthevaluechainCityDevelopmentLimited(CDL)isoneoftheworld’slargestrealestatecompanies,withanetworkspanning143locationsin28countriesandregions.BasedinSingapore,CDLhas60yearsofexperiencedevelopinghomesandbuildings,aswellasrunninghotelchainsaroundtheworld.CDLhaslongfocusedonsustainablegrowth,understandingtherealestateindustry’spositionasasignificantcauseofglobalemissions.Ithasembeddedclimateactionintoitsgovernance,introducingitsclimatechangepolicyin2015andcommittingtoreduceitscarbonemissionsbyaquarterby2030.ItisalsothefirstrealestatedeveloperinSingaporetojointheWorldGreenBuildingCouncil’sNetZeroCarbonBuildingsCommitment.Thecompanyhasalsofunded,completedandpublicizedclimatechangestudiesforfivecountries(Singapore,China,theUK,theUSandNewZealand)fortherealestateindustrybasedon1.5°C,2°Cand4°Cscenarios.33Ithasfocusedoninvestmentacrossdesign,procurementandoperationsofitsrealestateassets.Intermsofdesign,CDLhasnotonlylookedtowardspassivestrategiestoreduceheatgainbutalsointroducednewinnovationssuchasintegratedphotovoltaics,whichconvertlightintoenergy.Itisusingrecycledconcreteaggregatesandwashedcopperslagtoreplaceaggregatesforconcreteproductioninitsconstruction.Itisalsoupgradinghigh-consumptionassetssuchasliftsorchillers,replacingthemwithlower-energymodernizedversions.Throughdedicatedtracking,monitoringandimprovementsinenergyefficiency,CDLhasachievedcostsavingsofmorethanSGD$38millionfromreducedenergyexpensesacrossallmanagedpropertiessince2012.34Thisleadershipisbeingsharedacrossthecountryandacrossindustries.CDLisamongthepioneeringfirmsincludedinthefirst87companieswhosupporttheBusinessAmbitionfor1.5°CcampaigninSingapore.35CDLhaslongfocusedonsustainablegrowth,understandingtherealestateindustry’spositionasasignificantcauseofglobalemissions.AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction26CityDevelopmentLimitedreducedemissionsatagranularlevelFIGURE21GHGemissionsperm2leasedarea201620222030-24%-63%CDLhasbeenwidelyrecognizedforitsclimateprogress.Thecompanyhasdrivena24%reductioninCO2emissions-intensityperunitnet-lettablefloorareasince2016,andhassecuredmorethan$3billioninsustainablefinancingoverthepastfiveyears(Figure21)Forthoseachievements,CDLhasbeenrankedtoprealestatefirmbyCorporateKnights36andhasmaintainedDoubleAsinCDPforclimatechange(since2018)andwatersecurity(since2019)aswellasbeingawardedCDPSupplierEngagementLeaderforthethirdconsecutiveyear.3.5Unlockingnewgrowth7ExpandexistingvaluechainsBusinessesacrossAsiashouldviewclimateactionnotonlyasameansofreducingharmfulactivitybutalsoasawaytocreatenewvalue,spurnewrevenuestreamsandunlocknewgrowth.First,businessescandothiswithintheirexistingvaluechains,thoughtheseopportunitiesareoftenuniquetoeachindustryandorganization.However,bysegmentingcomponentsofthecorevaluechain,businessescanapplynewideasandinnovationtoeachareatocreatenewopportunities.AgoodexampleisGoToGroup,adigitalbusinessinIndonesiacomprisingon-demand,e-commerceandfinancialservicesthroughtheGojek,TokopediaandGoToFinancialplatforms.ThecompanyhasbeguntointegratesustainabilityacrossitsorganizationandecosystemthroughitsThreeZeros(zeroemissions,zerowasteandzerobarriers)by2030commitments.Forinstance,aspartofitszeroemissionsroadmap,GoToismakingstrategicoperationalshiftsacrossitsbusinesslinesaswellasfacilitatingcredible,testedsolutionsforthemillionsofpartnersacrossitsbusiness.Thecompanyhasbeguntoswitchitstwo-wheelvehiclesinIndonesiatolow-emissionalternatives.Italsoaimstotransitiontoa100%EVfleetby2030,andhasestablishedElectrum–ajointventurewithenergycompanyPTKaryaBaruTBS–toacceleratethedevelopmentofthecountry’sEVecosystem.Foritsfleetoperations,itisintegratingAI-enabledsoftwaretoimproveefficiencythroughsmarterallocationofdrivers.8DevelopnewcapabilitiesClimateactionalsooffersorganizationsthepotentialtoexploreemergingsolutionsandnewbusinessmodels,transformingwhatwasonceafundamentalchallengeintoanenginefornewgrowth(Figure22).Businesseswillneedtoassesstherelevantopportunitiesbasedonthetimeframeswithinwhichtheyareabletoworkandtheproximitytotheircorebusiness.Source:CityDevelopmentLimitedsustainabilityreportAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction27更多报告请关注公众号：全球行业报告库TurningclimatechallengesintobusinessopportunitiesFIGURE22FeasibilityProximitytocorebusinessNewNear-termLong-termAdjustmentCoreE.g.explorepotentialinvestmentsandentrystrategiesincarbonvaluechain(viaalliances,JVs)E.g.bioproductsinhighcarboncosteconomy:substitutefossilproducts(e.g.bioplastic,greenbuildingmaterials)E.g.explorepotentialplaysinBECCStobecomeacarbon-neutralenergysupplierE.g.exploreothernegative-emissiontechnologies,buildbiomass/wastetradingbusinessE.g.implementavoideddeforestationtobuildnucleuscarbonoffsetportfolioE.g.planandexecutereforestationprojects,leanintosustainableforestryandagriculturepractices3Applyexisitingcapabilitiesinnon-coreareas2Developnewcapabilitiesinadjacentbusinesses1Acquirenewcapabilitiestotapintonewhigh-growththemesTerrascope,backedbyOlamVenturesandbuiltwithsupportfromBCGXVentures,isoneexample.Theplatformenablesbusinessestomeasureandmanagetheircarbonfootprintwithprecision.Usingmachinelearningtoprocess,analyseandvisualizeemissionsdatainsimpledashboards,itallowsforinformeddecisionsregardingemissionsreductionandidentificationofopportunitiesforsustainablegrowth.Sinceitslaunchlessthanayearago,Terrascopehasworkedwithlargeenterprisesacross12industriesandmeasuredmorethan350millionmetrictonsofemissions.3.6Whatgoodlookslike:OlamcombinesdigitaltransformationandclimateactionHeadquarteredinSingapore,Olamisoneoftheworld’sleadingfoodandagribusinesses,supplyingfood,ingredients,feedstuffsandfibretomorethan20,000customersacross60countriesworldwide.Throughitspurpose–to“Re-imagineGlobalAgricultureandFoodSystems”–itaimstoaddressmanychallengesinvolvedinmeetingtheneedsofagrowingglobalpopulation,whileachievingpositiveimpactsforfarmingcommunities,theplanetandOlam’sstakeholders.ThecompanyhasbeeninvolvedinclimateactionforseveralyearsandhasbeenreportingtotheCDPsince2017.IthascommittedtoSBTitargets,includingforitsScope3emissions,andhaspledgedtosupporttheBusinessAmbitionfor1.5°Ccampaign.Inmakingclimateactionatoppriority,Olamhascommittedtoreachnet-zeroemissionsby2050.Withitscustomerandpartners,itcontinuestomakeprogressonaddressingitsclimateimpacts,protectingecosystemsandbiodiversity,enhancingwaterstewardship,reducingfoodlossandwaste,andregeneratingsoil.Itisfocusedonreducingitscarbonfootprintand,inlinewiththeSBTiFLAG(Forest,LandandAgriculture)guidelinesreleasedin2022,isSource:Companywebsites;BCGanalysisNote:JVs=jointventures;BECCS=bioenergywithcarboncaptureandstorageAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction28developingitsnear-termtargets,segmentedintoFLAGandnon-FLAG.TosupportthedevelopmentoftheupcomingGHGProtocolLandSectorandRemovalGuidance,OlamparticipatedinapilotstudycoordinatedbytheWorldBusinessCouncilforSustainableDevelopment(WBCSD)torefinetheaccountingmethodsforstoredcarboninbiogenicproducts(suchaswood),removalactivitiesimplementedatthesupplyshedlevel,andlandusechange.Olamalsocollaboratedwith14oftheworld’slargestagri-commoditytraderstodeveloptheAgricultureSectorRoadmapto1.5˚C,launchedatCOP27inNovember2022,towardsreducingemissionsrelatedtoland-usechangeandsupportingforest-positivesectortransformation.Theroadmapwillstrengthenprocessesandcollaborationformoretransparentandforest-positivesupplychains.Thecompanyistransformingitsbusinessandsupplychainstodecarbonizeandmitigatetheimpactofachangingclimate.Toachievethis,ithasbeenworkingwithTerrascope–anenterprise-grade,end-to-end,smartcarbonmeasurementandmanagementSaaS(software-as-a-service)platform–tomeasuresitscarbonfootprintacrossthreeScopes–directemissionsfromownedorcontrolledsources(Scope1),indirectemissionsfrompurchasedenergy(Scope2)andindirectemissionsthatoccurinthevaluechain(Scope3).Olamisalsoworkingtoreduceemissionsinitsthird-partysupplychainsthatareassociatedwithfarmingpracticesandsupportclimateresilience.Theapproachfocusesonfourareas:Adaptation:helpingfarmersadapttotheimpactsofclimatechangebyimprovingtheirskillstoimplementbetterfarmingpractices,andtheiraccesstotechnologysuchasirrigationequipmentandhigher-yielding,climate-resilientseedvarieties.Resilience:enablingfarmerstoincreasetheirhouseholdincomesbypromotingcropdiversification,aswellasotherincomeopportunitiessuchasbeekeeping.Additionally,Olamisstrengtheninglocalfarmercooperatives,improvingaccesstosavingsandloansfacilities,andcropinsurance.Regeneration:throughimprovedcroprotation,composting,mulching,soilerosioncontrol,integratedsoilfertilitymanagementandintegratedpestmanagement,helpingfarmerstoregeneratetheirsoilsandecosystems.Reduction:reducingemissionsbysequesteringcarboninsoilsandtreesthroughregenerativeagriculture,agroforestryandreforestationinitiatives;reducingpost-harvestlossfromimproperprocessing,dryingandstorage;andreducingmethaneemissionsfromricefarmingthroughbetterwatermanagementpractices.Toreducemethaneemissionsfromriceproduction,Olamhasintroducedclimate-smartagriculturepracticessuchasAWD(alternatewettinganddrying),laserlandlevelling,site-specificnutrientmanagement,andbetterstrawandstubblemanagement.BuildingonsuccesseswithricefarmersinThailandsince2018,theinitiativehasexpandedtoVietNam,Indiaand,now,Nigeria.Improvingsoilisfundamentaltomeetingclimateandbiodiversitygoals.Toidentifyhotspotareas,in2022,Olamharnessedgeospatialtoolsandlookedatindicatorsforsoilmoisture,NDVI(NormalisedDifferenceVegetationIndex),soilorganiccarbon,fireincidenceandcanopycoverlossacrossthefive-yearperiodfrom2016to2021.Thesewillbefollowedbyground-levelstudiesinidentifiedhotspotareasanddevelopingcontext-specificregenerativeagriculture.Olamishelpingsmallholderfarmersimplementpracticestoreducepost-harvestlosses,which,inturn,reduceemissionsandincreasefarmers’sales.In2022,itassessedthebaselineacrossrice,quinoa,sesameandothercropsinadozensupplychainsaroundtheworld,andisnowpilotingadaptedtechnology,suchasimprovedstoragebags,simplemoisturetestsandmodifiedscythes,toreducelosses.Olamisalsoattheforefrontofintegratingdigitalapplicationswithclimateaction.ThecompanyintroduceditsAtSourceapplication,asustainabilityinsightsplatformgivingcustomersrichdata,advancedfootprintingandgranulartraceabilityacrossagriculturalsupplychains.ItalsolaunchedtheOlamFarmerInformationSystem,whichusesGPSandsurveydata,providingfarmerswithbetterinsightsandreportingabouttheirfarmholdings.29AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction更多报告请关注公众号：全球行业报告库Followyourambitionswithcommittedactions4Asiawillbecentraltotheworld’sdecarbonizationresponse.Unmitigatedclimatechangeisthebiggestthreatfacingtheworld.Theglobaleconomycouldlosemorethan18%ofcurrentGDPifnoactiononclimatechangeistaken.AndtheimpactwouldbesignificantlyhigherinAsia,atalmost26%.Asiadrivesnotonlyglobaleconomicgrowth,butglobalemissions,too.And,whileprogressisbeingmadetomitigateandadapt,theresponsefromgovernmentandbusinessisnotmeetingthechallengetoday.TheexpansionoftheAsianmiddleclasshasundoubtedlyimprovedqualityoflifeintheregion.Policy-makersandcorporationsmustservethesepeoplewhoareexpectedtoconsumelargeramountsofenergy,productsandservicesastheybecomemoreprosperous.BalancingclimateimpactwhileprovidingtheenergyandinfrastructurefortheAsiancontinenttodeveloprequiresaninvestmentoftrillionsofdollarseachyear.Thislevelofinvestmentcannotbeachievedthroughpubliccapitalalone.Thechoiceforbusinessesisstark–theirorganizationalfutureisdependentontheactiontheytakeandinvestmentstheymaketodaytorealizeclimateoutcomes.ItisclearthatAsianbusinessesfacevariedchallengesandopportunities.Thesolutionstheyimplementmustbetailoredtomeetthosevariables.ItisthusvitaltocreateuniquelyAsianclimateactiontomeetbroader,globaldemands.Leadersshouldnotfeelthatclimateactionissolelyconcernedwithexistentialwarningsofdoom.Thereareclearopportunitiesfororganizationstoboostbrandperception,tapnewmarketsandcustomersviainnovativebusinessmodels,anddrivecompetitiveadvantagewithinandbeyondexistingvaluechains.Thisrequiresmorethanmakingpledgesontheworldstageandstatingnet-zeroambitionsatsummits,thoughtheseactionsareimportant.Itdemandsastrategictransformationbasedonclearimmediate,medium-andlong-termactions.ItistimeforAsiancorporateleaderstomakeboldchangesforthegoodoftheirbusinessesandtheregion.Actionisneededtomakepledgesareality.AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction30ContributorsBostonConsultingGroupAndreyBerdichevskiyPartner&AssociateDirectorArtakMikaelyanConsultantMarcSchmidtManagingDirector&PartnerMaiVuAssociateSAPApoorvBhatnagarRegionalHeadofValueAdvisory,South-EastAsiaAbhinavSinghalVice-PresidentandHeadofStrategy,AsiaPacific&JapanPaulThompsonHeadofContentStrategy,Asia-Pacific&JapanAcknowledgementsNeerajAggarwalManagingDirector&SeniorPartner,Chair,Asia-Pacific,BostonConsultingGroupClaraChungHeadofBusinessEngagementAsia-Pacific,WorldEconomicForumMichelFrédeauManagingDirectorandSeniorPartner,BostonConsultingGroupRamyaKrishnaswamyHeadofInstitutionalCommunitiesandESGInitiative,andMemberoftheExecutiveCommittee,WorldEconomicForumJoo-OkLeeHeadofRegionalAgendaAsia-Pacific,andMemberoftheExecutiveCommittee,WorldEconomicForumPaulMartinMarriottPresident,SAPAsia-Pacific&Japan,SAPGimHuayNeoManagingDirector,CentreforNatureandClimate,WorldEconomicForumCorneliusPieperManagingDirectorandSeniorPartner,BostonConsultingGroupDanielSchmidChiefSustainabilityOfficer,SAPDaveSivaprasadManagingDirector&Partner,SEAClimateandSustainabilityLead,BostonConsultingGroupSebastianSteinhaeuserChiefStrategyOfficer,SAPPimValdreHeadofClimateAmbitionInitiatives,WorldEconomicForumProductionStudioMikoLaurenceDenmarkCreativeDirectorSophieEbbageDesignerOliverTurnerDesignerAstraContentAlisonMooreEditorAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction31更多报告请关注公众号：全球行业报告库1.WorldMeteorologicalOrganization,WMOGlobalAnnualtoDecadalClimateUpdate2022–2026:https://library.wmo.int/doc_num.php?explnum_id=11175#:~:text=The%20annual%20mean%20global%20near,over%20years%201850%2D1900.2.Ibid.3.Myllyvirta,Lauri,Analysis:China’sCO2EmissionsFallbyRecord8%inSecondQuarterof2022,CarbonBrief,1September2022:https://www.carbonbrief.org/analysis-chinas-co2-emissions-fall-by-record-8-in-second-quarter-of-2022.4.ClimateWatch,HistoricalGHGEmissionsData:https://www.climatewatchdata.org/ghg-emissions;BCGanalysis.5.Statista,DistributionoftheGlobalPopulation2022,byContinent:https://www.statista.com/statistics/237584/distribution-of-the-world-population-by-continent/;BCGanalysis.6.OurWorldinData(OWID)EnergyDatasets:https://github.com/owid/energy-data;BCGanalysis.7.WorldEconomics,TheFutureisAsian,4April2023:https://www.worldeconomics.com/Thoughts/The-future-is-asian.aspx#:~:text=Today%2C%20the%20Asian%20share%20of,remarkably%20short%20space%20of%20time;BCGanalysis.8.InternationalEnergyAgency(IEA),WorldEnergyOutlook2021,October2021:https://www.iea.org/reports/world-energy-outlook-2021.9.InternationalEnergyAgency(IEA),WorldEnergyOutlook2022,November2022:https://iea.blob.core.windows.net/assets/830fe099-5530-48f2-a7c1-11f35d510983/WorldEnergyOutlook2022.pdf.10.Roser,Max,EconomicGrowth,OurWorldinData(OWID):https://ourworldindata.org/economic-growth;BCGanalysis.11.CDP,DespiteGrowingAwarenessofClimateRisks,Just8%ofCompaniesinAsiaPacificRegionHaveCommittedtoNet-ZeroTargets,31March2022:https://www.cdp.net/en/articles/media/despite-growing-awareness-of-climate-risks-just-8-of-companies-in-asia-pacific-region-have-committed-to-net-zero-targets.12.InternationalEnergyAgency(IEA),SoutheastAsiaEnergyOutlook2022:https://www.iea.org/reports/southeast-asia-energy-outlook-2022.13.SAP,DoesYourBusinessHaveaTalentforSustainability?:https://www.sap.com/insights/research/does-your-business-have-a-talent-for-sustainability.html.14.Whiting,Kate,‘WoefullyInadequate’ClimatePledgesandOtherClimateChangeStoriesYouNeedtoReadThisWeek,WorldEconomicForum,24October2022:https://www.weforum.org/agenda/2022/10/climate-pledges-and-other-climate-change-stories-24-october.15.Nash,VishnuandAgrawal,Rajat,BarrierstoConsumerAdoptionofSustainableProducts–anEmpiricalAnalysis,SocialResponsibilityJournal:https://doi.org/10.1108/SRJ-12-2020-0495.16.SAP,DoesYourBusinessHaveaTalentforSustainability?:https://www.sap.com/insights/research/does-your-business-have-a-talent-for-sustainability.html.17.UNIntergovernmentalPanelonClimateChange(IPCC),GlobalWarmingof1.5°C:https://www.ipcc.ch/sr15;Saeed,Fahad,Schleussner,Carl-FriedrichandAshfaq,Moetasim,DeadlyHeatStresstoBecomeCommonplaceAcrossSouthAsiaAlreadyat1.5°CofGlobalWarming,GeophysicalResearchLetters,48(7),16April2021:https://agupubs.onlinelibrary.wiley.com/doi/10.1029/2020GL091191;BCGanalysis.18.UNIntergovernmentalPanelonClimateChange(IPCC),SpecialReportontheOceanandCryosphereinaChangingClimate:https://www.ipcc.ch/srocc/;https://data.worldbank.org/topic/climateknowledgeportal.worldbank.org;BCGanalysis.19.Gardner,DinahandGreenpeaceEastAsia,FiveFactsaboutSea-LevelRiseinAsiaThatWillSurpriseYou,Greenpeace,1July2021:https://www.greenpeace.org/eastasia/blog/6679/five-facts-about-sea-level-rise-in-asia-that-will-surprise-you.20.Timsit,AnnabelleandKaplan,Sarah,AtLeast85PercentoftheWorld’sPopulationHasBeenAffectedbyHuman-InducedClimateChange,NewStudyShows,TheWashingtonPost,11October2021:https://www.washingtonpost.com/climate-environment/2021/10/11/85-percent-population-climate-impacts.21.WorldBank,ClimateChangeKnowledgePortal:https://climateknowledgeportal.worldbank.org.22.SwissReInstitute,TheEconomicsofClimateChange:NoActionNotanOption,April2021:https://www.swissre.com/dam/jcr:e73ee7c3-7f83-4c17-a2b8-8ef23a8d3312/swiss-re-institute-expertise-publication-economics-of-climate-change.pdf.23.GlobalCommissiononAdaptation,AdaptNow:AGlobalCallforLeadershiponClimateResilience:https://gca.org/wp-content/uploads/2019/09/GlobalCommission_Report_FINAL.pdf.24.Temasek,theWorldEconomicForumandAlphaBeta,NewNatureEconomy:Asia’sNextWave:Risks,Opportunities,andFinancingforaNature-PositiveEconomy,2021:https://accesspartnership.com/wp-content/uploads/2023/01/210917-new-nature-economy-asia_high-res_spread.pdf.25.InternationalEnergyAgency(IEA),EnergySecurityinASEAN+6,July2019:https://www.iea.org/reports/energy-security-in-asean6.26.WoodMackenzie,AsiaPacificSolarPVMarketOutlook2021,June2021.EndnotesAcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction3227.InternationalEnergyAgency(IEA),South-EastAsiaEnergyOutlook2022:https://iea.blob.core.windows.net/assets/e5d9b7ff-559b-4dc3-8faa-42381f80ce2e/SoutheastAsiaEnergyOutlook2022.pdf.28.Read,Simon,WhatIstheDifferenceBetweenScope1,2and3Emissions,andWhatAreCompaniesDoingtoCutAllThree?,WorldEconomicForum,20September2022:https://www.weforum.org/agenda/2022/09/scope-emissions-climate-greenhouse-business/.29.ScienceBasedTargets,Ambitious,CorporateClimateAction:https://sciencebasedtargets.org/.30.ExtractiveIndustriesTransparencyInitiatives,Indonesia2019-2020EITIReport,March2022:https://eiti.org/documents/indonesia-2019-2020-eiti-report.31.AcademyofSciencesMalaysia,TheNexusofBiodiversityConservationandSustainableSocioeconomicDevelopmentinSouth-EastAsia:https://www.akademisains.gov.my/asm-publication/nexus-of-biodiversity.32.DNV,IndoramaVenturesPublicCompanyLimitedSustainability–LinkedFinanceFramework:SecondPartyOpinion–ScopeandObjectives:https://sustainability.indoramaventures.com/storage/content/slb-second-party-opinion-report/2021/doc.pdf.33.CityDevelopmentsLimited,ClimateChangeandEmissionsReduction:https://cdlsustainability.com/cdl-six-capitals/natural-capital/climate-change-and-emissions/climate-change-scenario-planning/.34.CityDevelopmentsLimited,IntegratedSustainabilityReport2023:ZeroinonPositiveImpact,1January–31December2022:https://cdlsustainability.com/pdf/CDL_ISR_2023.pdf.35.ScienceBasedTargets,BusinessAmbitionfor1.5°C:https://sciencebasedtargets.org/business-ambition-for-1-5c/.36.CorporateKnights,The100MostSustainableCorporationsof2022,19January2022:https://www.corporateknights.com/rankings/global-100-rankings/2022-global-100-rankings/100-most-sustainable-corporations-of-2022.AcceleratingAsia’sAdvantage:AGuidetoCorporateClimateAction33更多报告请关注公众号：全球行业报告库WorldEconomicForum91–93routedelaCapiteCH-1223Cologny/GenevaSwitzerlandTel.:+41(0)228691212Fax:+41(0)227862744contact@weforum.orgwww.weforum.orgTheWorldEconomicForum,committedtoimprovingthestateoftheworld,istheInternationalOrganizationforPublic-PrivateCooperation.TheForumengagestheforemostpolitical,businessandotherleadersofsocietytoshapeglobal,regionalandindustryagendas.
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