Human-powered solutions: the key fuel to reach net zero
As global efforts to slow climate change intensify, how we make the best use of the levers at our disposal – technology, sustainable finance and talent – will determine the quality of our net zero future and how fast we arrive at it.
Doing so requires the collective effort of governments, businesses and individuals alike. The government’s role of setting policies and frameworks is critical, and Asia is leading by example.
Singapore’s plans to curtail emissions through a ten-fold increase in its landmark carbon tax by 20301, Vietnam’s decision to move ahead with its pilot direct power purchase agreement (DPPA) scheme that will improve access to renewable energy-powered electricity2, and the Hong Kong SAR government’s recent launch of a retail green bond that will raise more capital for sustainable development projects3, underscore national commitments to drive change.
In all of this, the business sector has a key role to play. To drive a sustainable future, we need to focus beyond achieving the 1.5 degrees Celsius target or a 45 per cent reduction in greenhouse gas emissions by 20304. The human element is equally important.
Truly engaging organisations and individuals to make a meaningful difference to the planet earth is a huge opportunity we cannot miss. Afterall, the climate crisis is not a numbers game. It is a human issue that requires a human solution, and every organisation can contribute by mobilising their talent and manpower.
Global warming is a human issue
For a start, organisations that are leading the pack in their net zero journey have the responsibility to uplift others and collaborate to effectively combat climate change.
Industry effort in setting up alliances and platforms is a testament that cross-sector engagement is driving the necessary change. The Alliance for Green Commercial Banks launched by the IFC and the Hong Kong Monetary Authority and the Monetary Authority of Singapore-led Project Greenprint are two such industry partnerships that Standard Chartered supports.
In addition, shifting employees’ mindsets about what climate action means to an organisation can help the world take a big leap forward. For the Bank, our employees are our key resource that will help us achieve our net zero carbon emissions from our operations by 2025 and from our financing by 2050.
As with every other financial institution, we play a key role in developing and scaling the structures that will channel the trillions required by emerging markets for their net zero transition. Finance is critical to the net zero agenda; it moves capital to where it matters most and areas that need it pressingly.
For example, we cannot fight climate change efficiently without the capital investment and application of new digital solutions to the problem at hand. According to the World Economic Forum, digital solutions such as IoT, imaging and geo-location, if scaled across industries, can cut global emissions by up to 20 per cent5.
Mobilise resources with technology
To transform the climate threat into opportunity, Standard Chartered continues to deploy sustainable finance to support the development of innovative industries, from e-commerce to clean technologies and the semiconductor sector. In 2021, the Bank in Taiwan, Hong Kong and Singapore jointly inked the largest sustainability-linked loan across our global footprint to provide TSMC, the world’s biggest contract chipmaker, a USD2 billion facility6.
To accelerate climate action, the leveraging of new technologies can also build trust and open doors for more countries and corporates to participate.
New and rapidly evolving technologies such as digital infrastructure that account and track carbon reductions, and blockchain technologies which help ensure transparency of projects, are helping countries make building their new carbon markets a reality7. Our Climate Impact X partnership with DBS, SGX and Temasek leverages new technologies to enhance transparency, integrity and quality of carbon credits8.
With the global market for carbon credits estimated to be worth upward of USD50 billion in 20309, the benefit that carbon markets can bring to the region will be tremendous. In ASEAN alone, the economic opportunities to be created by voluntary carbon markets are projected at USD10 billion by the same year10.
New technologies will no doubt continue to improve our ability to combat climate change. As a bank and a corporate citizen, we have to make a concerted effort to provide financing to areas that matter, and scale everyone up so that climate action becomes a common cause that is worth fighting for.
After all, humans are the ones powering the solutions, and we’re in it for the long haul.
The writer is Head of Sustainable finance, Asia, Standard Chartered.
Source: The Business Times © Singapore Press Holdings Limited. Permission required for reproduction.
1 https://www.nea.gov.sg/our-services/climate-change-energy-efficiency/climate-change/carbon-tax
4 https://www.un.org/en/climatechange/net-zero-coalition
5 https://www.weforum.org/agenda/2022/05/how-digital-solutions-can-reduce-global-emissions/
7 https://www.weforum.org/agenda/2022/07/countries-on-the-cusp-of-carbon-markets/
8 https://www.climateimpactx.com/news