Setting the Scene: What are Asia's green priorities?

Summary

In this engaging conversation, Steve Howard, a seasoned sustainability expert, discusses Asia's green future and the importance of aligning long-term investment strategies with climate goals. He shares insights on TESC's sustainability approach, highlighting the integration of carbon pricing, net-zero targets, and innovation across sectors. Howard emphasizes the critical role of clear policy frameworks and carbon markets in driving green transitions. He also reflects on the transformative potential of sustainability in business, urging companies to embrace it as a source of innovation for long-term growth and resilience.

Takeaways

• 😀 Asia is experiencing rapid progress in climate initiatives, but the real challenge is turning ambition into reality with only five years left until 2030.
• 😀 Establishing clear priorities and a roadmap for Asia's green future is essential to aligning efforts and ensuring sustainability goals are met.
• 😀 Steve Howard's career spans across significant sustainability leadership roles, including founding Climate Group, serving as IKEA's Chief Sustainability Officer, and now as Vice Chair of Sustainability at TESC.
• 😀 TESC, a state-owned investment firm, aligns its strategy with long-term sustainability goals and has incorporated climate change and digitization as two of the key trends reshaping the 21st century.
• 😀 TESC applies a long-term investment approach with a purpose-driven statement, aiming for 'every generation prospers' and focusing on capital markets' sustainability.
• 😀 Carbon pricing, net-zero targets, and incentives are part of TESC’s strategy to drive sustainability in its investments, including engaging portfolio companies and measuring emissions.
• 😀 A culture shift is underway in the investment world, particularly among long-term investors like pension funds and sovereign wealth funds, who now see tackling climate change as part of their fiduciary responsibility.
• 😀 Governments play a crucial role by setting a clear long-term policy framework that favors the clean economy, helping businesses and investors plan and innovate with certainty.
• 😀 Carbon markets are vital for decarbonization, and there is a need to focus on transforming challenges like deforestation and coal reliance into opportunities for growth.
• 😀 Asia's diverse needs present both challenges and opportunities in the green transition, including addressing deforestation, decarbonization, agriculture, and leveraging renewable energy resources.
• 😀 The next decade holds immense potential for innovation, with businesses that lean into sustainability expected to thrive, positioning sustainability as the key to future economic growth.

Q & A

What is the primary challenge in turning Asia's green future into reality?

The primary challenge is establishing clear priorities and setting a roadmap to guide the transition. With only five years left until 2030, it is crucial to define and implement actionable strategies for a sustainable future in Asia.

What is Steve Howard’s experience in sustainability and climate solutions?

Steve Howard is a pioneering sustainability investor and business leader with over three decades of experience. He founded the Climate Group, served as the CEO of the organization, and later became the Chief Sustainability Officer at IKEA. He is currently the Vice Chair of Sustainability at TESC.

What role does sustainability play in TESC's strategic vision for 2030?

Sustainability is one of the four core pillars outlined in TESC’s T2030 strategy. The company is focused on long-term investments that align with the mega trends of climate change and digitization, which are reshaping the 21st century.

How does TESC integrate sustainability into its investment approach?

TESC integrates sustainability by aligning its investments with long-term climate and sustainability trends, creating internal carbon pricing, setting net-zero targets, and engaging portfolio companies to meet these goals. Incentives are also aligned with sustainability performance.

How does TESC manage internal carbon budgeting?

TESC has implemented an escalating internal carbon price and allocated carbon budgets to its teams. The firm has also set clear net-zero targets and engages its portfolio companies in achieving these sustainability milestones.

What is the significance of long-term investing for TESC?

As a long-term investor, TESC emphasizes investing in initiatives that contribute to sustainable growth. They believe that the best indicator of long-term financial returns is economic growth, and thus, they prioritize investments that support climate change mitigation and sustainability.

How do asset owners, like TESC, differ from asset managers in terms of investment strategy?

Asset owners, such as TESC, focus on long-term investments with a view to ensuring long-term financial sustainability, like pensions for future generations. In contrast, asset managers are more responsive to market trends and client demands, often focusing on short-term returns.

What are some of the green challenges and opportunities in Asia?

Asia faces challenges such as deforestation, coal dependency, and the need for a just transition away from coal. However, opportunities exist in carbon markets, renewable energy, and innovations in sectors like agriculture, electric vehicles, and smart cities.

What role do carbon markets play in Asia's green transition?

Carbon markets are crucial in providing a financial mechanism for driving emissions reductions. They create a demand signal for carbon trading, incentivizing businesses to reduce their carbon footprint and supporting transitions away from carbon-intensive industries like coal.

How does Singapore's energy situation differ from other countries in Southeast Asia?

Singapore is a dense, energy-importing island due to its population density, whereas other countries in the region, such as Indonesia, Vietnam, and Laos, have rich renewable energy resources like geothermal and solar potential, enabling them to potentially become net exporters of energy.

What is Steve Howard excited about for the next decade in terms of sustainability?

Steve Howard is excited about the potential of human innovation to solve climate challenges. He believes that every business problem can be turned into a business opportunity, and that sustainability will be the foundation of thriving businesses in the future.