The window to decarbonise and limit warming to 1.5?C above pre-industrial levels is rapidly closing. PwC has launched a report: "Code Red - Asia Pacific's Time To Go Green" which tracks the rate of decarbonisation in the region, revealing that Asia Pacific needs to significantly increase its efforts to decarbonise. It also outlines the role business has to play in transitioning to net zero by collaborating with government, leading the change and grabbing the golden opportunity for green growth.
In 2020, Asia Pacific was responsible for 52% of the global CO2 energy related emissions. While territories across the region are at different stages of development and have very different socio-economic conditions, demand for energy will necessarily vary across the region. As long as fossil fuels make up a significant portion of the region's energy mix, decarbonisation will be too slow.
Raymund Chao, PwC Asia Pacific and China Chairman commented: "The world is experiencing far greater impacts from climate change and far sooner than predicted. The time for business to commit to net zero is now. The window to decarbonise and limit warming to 1.5?C above pre-industrial levels is rapidly closing. The Asia Pacific region has a key role to play, not least because it will acutely feel the consequences of a warming world on its societal and economic growth fundamentals."
Government and business must collaborate
The race to net zero will start with top-down commitment and strengthened national targets - which has been a key highlight at the recent COP26 meetings. Governments have a big part to play in transforming energy systems, industries, economies, and societies. However, this is not - and was never - a journey that governments can undertake alone.
Commenting on this, Sri Nair, PwC Asia Pacific Vice Chairman, Markets said: "Businesses have a golden opportunity for green growth. Those that move first and fast will position themselves favourably with changing consumer attitudes, new technologies and new markets. Every business and every market is unique, so there is no one-size-fits-all solution. Businesses must reassess their strategy - a journey to net zero should begin with a fresh look at purpose, performance and people."
Reimagining business for net zero
With the need for change now widely accepted, the focus for Asia Pacific businesses must shift to how and what they can do to accelerate their own decarbonisation while enabling and incentivising their broader stakeholders to follow suit. A commitment to net zero requires every business to reimagine the possible, and based on that vision deliver an end-to-end transformation of its strategy, operating model and technology. PwC believes that the call to action for businesses in Asia Pacific should include:
- Ambition for action: When it comes to the impact a business has on the climate, change must start at the top. Leaders need to take transparent and vocal ownership of their organisation's commitment to net zero.
- A comprehensive 'green' transformation: Move first. Move fast. Move comprehensively. There is scope for business across Asia Pacific to proactively lead the transition and adopt net zero targets.
- Leveraging emerging sources of capital: Investment is essential. Financing (and delivering) the shift to net zero needs innovative and sustainable partnerships between all stakeholders with public and private investment at scale and speed.
- Building trust through targeted reporting: Data and transparency are crucial. This should power a renewed governance and reporting model to align decision makers and build trust with all stakeholders.
Chanchai Chaiprasit, PwC Thailand's CEO said: "Climate change is the most urgent item on the global agenda.
"A code red has been issued for humanity and it's time for governments and business to share responsibility. We need to work together to reach net zero and we must act immediately to meet the COP26 goal of limiting global warming to 1.5?C.
"Going forward, it's essential for every organisation to commit to this target. Those who move fastest on this issue will gain a competitive advantage because of changing investor and consumer expectations about how businesses respond to climate change," Chanchai said.
The size of the opportunity in front of Asia Pacific businesses is immense. The growth trajectory of the Asia Pacific region has been widely documented in recent years. Net zero transformation ensures that business growth not only benefits the bottom line, but also leaves a lasting legacy for people and the planet. Now is the time to act.