Asian Utilities: Expanding Perspectives on the Carbon Threat

Climate disruption

Preventable Surprises recently held its sixth online dialogue with a specific focus on the Asia energy utility sector, which is estimated to be responsible for more than 20% of global emissions from fossil fuels. Many Asian countries are only now beginning to adopt policies to shift the fuel mix from fossil fuels to renewables. The dialogue explored the role investors and lenders can play in accelerating the transition to clean energy.

As befits a 24-hour- a-day industry that soils the air with around-the- clock emissions, our dialogue never slept. The Australians kicked us off each morning while the Californians got the final word each day. In all 31 participants from Australia, Japan, Republic of Korea, China, Singapore, India, UK, Germany, Denmark and the United States took part, from the investor community, think tanks, NGOs, science and law.

The mix of participants gave rise to a very interesting and lively discussion. Some of the key insights:

  • Asian audiences are more likely to respond to efforts to highlight specific environmental impacts such as air pollution, water scarcity, and sea level rise (different issues in different countries). Promoting TCFD and the Paris Agreement is seen as a less useful narrative. Opportunities to gain commercial advantage from new technologies are also a winning argument in countries with a history of technological innovation.
  • Western investors looking to create change could look in their own backyard. British, U.S. and European banks are, like Chinese banks, funding coal-fired power stations in low-income countries, while renouncing these projects domestically. One participant shared that over the last three years, HSBC alone provided loans or underwriting services to companies which collectively plan to build coal-fired capacity equal to the entire operating fleet of India, the UK, and Poland combined.
  • Of the four largest Asian economies, Japan was seen as the slowest to shift its energy policy towards renewables. While it would be difficult to directly influence energy companies or government policy, investors were urged to engage with other Japanese companies and companies with a Japanese supply chain such as Apple. Such companies are in a position to put pressure on the Government to move away from coal. This could be particularly effective with four Japanese companies belonging to RE100, a grouping of companies committed to using 100% renewable energy.

Two summaries seek to capture the three-day event. A high level infographic is organised categorised using seven topics, as was the event itself, while a longer event summary organises content into four overriding themes.

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