SCB study: Asean firms slow to meet climate goals

THREE in five companies based in the Association of Southeast Asian Nations (Asean) region are not transitioning to net zero fast enough, leaving them in danger of missing the Paris Agreement target of net zero carbon emissions by 2050, new research from Standard Chartered Plc. (SCB) has revealed.

“Zeronomics,” a study into the financing of a net zero world, surveyed the senior leadership of 250 large companies and 100 investment specialists around the world between September and October last year, the British multinational lender said.

The bank added the survey revealed that:

n 60 percent of Asean-based business leaders believe their companies are not transitioning fast enough (55 percent of companies globally)

n Lack of support from their own investors is the biggest barrier to progress for companies in this region, cited as a significant obstacle by 73 percent (60 percent globally)

n Carbon-intensive industries and companies based in emerging markets are struggling most with the transition

n Just 40 percent of Aseanbased companies fully support the aims of the Paris Agreement (47 percent globally)

According to Standard Chartered, many Asean-based companies are looking to delay significant action to after 2030, with the 2020s looking set to be a lost decade. Just 20 percent of business leaders (34 percent globally) said their companies will make the most progress between 2030 and 2040, while 53 percent (37 percent globally) said they will take most action between 2040 and 2050.

“Most companies are delaying transition because they do not feel they are currently equipped to meet the target,” the lender said. “Some 60 percent (59 percent globally) said they need extensive organizational change before tackling net zero.”

A lack of investor support isn’t the only hurdle companies in Asean face, the bank said in a statement.

The British financial institution explained that about 70 percent (67 percent globally) of business leaders believe a lack of finance is hampering transition, while seven in ten (60 percent globally) believe that a lack of support from executive leadership is a significant obstacle.

Meanwhile, Covid-19 is forcing many businesses in the region to focus on immediate survival: “A whopping 97 percent (85 percent globally) of senior executives say the pandemic has delayed their company’s net-zero transition.”

Bill Winters, Group Chief Executive of Standard Chartered, was quoted in the statement as saing their survey reveals that most companies intend to transition to net-zero by 2050 “but have yet to take the action needed to get there.”

“A majority cite funding as an obstacle and carbon-intensive industries and emerging-market companies struggle the most,” Winters added. “A successful net-zero transition must be just, leaving no nation, region or community behind and, despite the hurdles, action needs to be swift.”

He urged entities to “act now” and “act together: companies, consumers, governments, regulators and the finance industry must collaborate to develop sustainable solutions, technologies and infrastructure.”

“Zeronomics” examines the economics of transitioning to a net-zero carbon future, the bank explained.

The financial intermediary added it commissioned the study “to understand how far companies have come on their journey to decarbonize and it reveals a gulf between words and action.”

“Reaching net zero carbon emissions by 2050 will be a considerable challenge,” SCB said. “Every organization in every sector has a critical role to play in limiting global warming. Commitment to this agenda must be top of mind for all companies—public and private, large and small—and to succeed they must undergo major transformation.”