NEWS
Achieving net zero is more of a challenge in Asia-Pacific
In a poll of delegates at SIRC 2022, 22 percent said their organisation had a high priority and level of intent towards reaching net zero.
In a poll of delegates at SIRC 2022, just 22 percent said their organisation had a high priority and level of intent towards reaching net zero. Forty percent said their organisation has a medium priority, and 38 percent said it was low.
The vote was taken in a plenary session on Wednesday November 2 titled “The Transition to Net Zero—Commitment or Lip Service?”. Discussing the current landscape and the challenges faced in Asia-Pacific in particular when it comes to achieving net zero, panellist Henrik Naujoks, partner and head of APAC Financial Services Practice, Bain & Company, said that the pressure on businesses as a whole has been significantly increased by various stakeholders.
These include governments, consumers, and investors who place an emphasis on ESG factors.
“Last but not least you have employees—97 percent of the Asia-Pacific employees expect their employers to act sustainably and engage on this journey,” Naujoks said.
“It’s not a single factor. It’s not a fashion. It’s not only a necessity, I think that, fortunately enough, a lot of the stakeholders are putting a lot of pressure on. Now the question is, have reinsurers reacted?”
“Putting this into action is challenging.”
Henrik Naujoks, Bain & Company
He noted that a far higher percentage of banks than insurers have pledged to reach net zero by 2050. Discussing what holds the industry back in Asia-Pacific, he noted that 55 percent of electricity in the region is dependent on coal.
“These are often young, relatively new coal factories, 10 to 20 years old,” he said. “In Europe and the Americas, it’s 30 to 40 years.”
Naujoks said that this made transitioning into new energies a totally different prospect for these for these countries, with very different levels of affordability.
“Germany is financing the exit from coal—we cannot expect this in the Asian countries, so there are a lot of questions where you have to say: ‘How do we react to that in Asia-Pacific’.
“A pledge for net zero is one thing, but putting this into action is challenging,” he concluded.
Main image: Shutterstock / Black Salmon
