Climate adaptation, mitigation could add US$4.3 trillion in opportunities in Apac by 2030: WEF
CLIMATE adaptation and mitigation business opportunities in Asia could spur an additional US$4.3 trillion of revenue and 232 million new jobs in the region by 2030, a World Economic Forum (WEF) white paper has stated.
Just the top 10 of those business opportunities alone could generate US$2.3 billion in revenue and 133.5 million jobs in the Asia-Pacific, it said. The paper was jointly prepared with the Boston Consulting Group and business software provider SAP. These business openings include the expansion of nature-positive renewables, energy efficiency in buildings and organic food and beverages.
Climate adaptation is the acknowledgement that, despite all progress made in climate action, global temperatures will continue to rise. Hence, changes must be made to adapt to the results of climate change.
Climate mitigation, on the other hand, aims to slow and ultimately reduce the rate of global warming. This is most often done through investing in decarbonisation, slowing greenhouse-gas emissions and removing existing greenhouse gases from the atmosphere.
Both climate adaptation and mitigation are crucial in combating the climate crisis, the paper stated.
“A focus on adaptation does not concede that the battle to mitigate the effects of climate change has been lost”, noted the report. Instead, effective implementation of corporate climate action requires integrated responses that link adaptation and mitigation.
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Investments into adaptation could return four to nine times the amount put in, assuming a five-year investment period, the report estimated. These could include early-warning systems, global mangrove protection, climate-resilient infrastructure and improved dryland agriculture crop production.
But because the impacts of climate change differ with each country, adaptation must be considered on a country-specific basis. This means pursuing projects with local involvement that are focused on short-term risk reduction, as well as on investments that improve the resilience of systems and infrastructure.
Investment is required in a variety of areas for climate mitigation, including clean-energy infrastructure, transport to assist the growth in population mobility, and agriculture and forestry in countries with big farming industries.
Asia’s ability to combat climate change is critical for the world. The region produces the largest share (51 per cent) of contemporary global emissions, and is also the biggest driver of global economic growth.
The region is expected to lead the way in clean-energy investment over the next decade, with opportunities to increase the small installation bases of solar and wind infrastructure, the report said. However, this will require countries to “balance funding for climate action alongside competing agendas and national priorities such as big infrastructure projects, transport programmes or social campaigns”.
“The world’s success or failure in achieving its shared climate goals will be critically dependent on the performance of countries and companies in Asia,” the report stated.
For now, the larger companies have been leading the way. City Developments (CDL) in Singapore, for example, with a network spanning 143 locations in 28 countries and regions, has been widely recognised for its climate progress, the report said.
CDL has driven a 24 per cent reduction in carbon-dioxide emissions-intensity per unit of net-lettable floor area since 2016, and has secured more than S$3 billion in sustainable financing over the past five years.
Currently, over 80 per cent of its revenue comes from clean and energy-efficient building construction and management. It reported energy savings of over S$38 million in the past decade, from energy-efficient retrofitting and initiatives across all its commercial buildings. It is planning to do even more.
Esther An, chief sustainability officer at CDL, said at the roundtable discussion held with the launch of the report that it is important for companies to identify the top material issues that would enable them to create the impact they desire. CDL, on its part, has identified 17 such issues, including newer ones such as circular-economy solutions.
She did not disclose the amount CDL was spending on such areas, but said: “There’s definitely ROI (return on Investment) – much faster than before.”
The prevalence of family-run businesses in corporate Asia, however, presents a challenge to the region. It is estimated that small to medium-sized enterprises (SMEs) make up some 80 to 90 per cent of all companies in this part of the world.
“So, we must have a mechanism of getting scale and volume in the mid-market,” said Paul Marriott, president for Asia-Pacific and Japan at SAP. He added that making it easier for companies to get the kind of technology that larger companies typically have access to would be key to enabling the shift.
Working in favour of this is the interest SAP says it has seen from the SME quarter. Verena Siow, president and managing director for South-east Asia at SAP, said: “We see huge interest from mid-sized companies because of two things: firstly, the regulations coming up in a lot of these countries; and secondly, smaller companies are interested in raising funding.”
She added: “If we have the solutions that Paul (Marriot) had shared, to enable (smaller companies) to record, to report and to act on sustainability, it would help them to build that foundation when they’re small. As they grow, they can leverage on innovation and drive their sustainability strategy.”
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