How can we secure net zero in these turbulent times?Hear from business leaders

In 2022, the world faced highly relevant, complex and dynamic political, economic and social risks, as highlighted in the 2023 Global Risks Report. The result will be disruptions in food, energy, cyber, supply chains, finance and global security, and how quickly the race to achieve net zero emissions by 2050 will be jeopardized by unexpected shocks. was shown to be possible.

It presents challenges that governments, businesses and the general public must face together. How do we navigate geopolitical challenges to achieve unprecedented systemic transformation that decarbonises the global economy?

Business organizations will consider their products, value chains and processes to enable this net-zero transition while managing risk and building resilience in the face of ongoing economic shocks. You are asked to

With these two pressures in mind, we asked business leaders about the short- and long-term actions they are taking on those fronts and what are the key parameters for a sustainability strategy that also emphasizes resilience. I was.

Bonnie Y Chan, HKEX Head of Listing

Integrating ESG and net-zero principles into business strategy can help mitigate supply chain disruptions, rising geopolitical tensions, or ongoing pandemic-related challenges. To incorporate net-zero principles into business strategy, companies must start with the board of directors. Because change is most effective when it comes from the top.

This means that board members should champion a culture of good ESG management and embrace an “ESG mindset” when setting the strategic direction of the business. With the right mindset and investment tools in place, companies can build effective internal governance and implementation frameworks covering areas such as risk management, measurement and reporting to implement climate strategy across the organization. can.

At HKEX, we pride ourselves on being change agents in Asia’s transition to sustainability. As regulators, market operators and publicly traded companies, we promote sustainability issues through listing regulation, advocacy and education, and foster cultural change within our organisations. For example, we provide a clear framework and guidance to the market through our Corporate Governance Code and his ESG Guide.

We also facilitate the creation of a vibrant and sustainable financial ecosystem through our partnerships, products and people to fund the transition to a more sustainable low-carbon future. In October 2022, we launched our new carbon marketplace, Core Climate. It links capital with climate-related products and opportunities in and outside Hong Kong.

Amy Barnes, Head of Sustainability and Climate Change Strategy, Marsh

COVID-19. War in Ukraine. Increased climate-induced floods, droughts and fires. Serious recent events highlight the vulnerability of the corporate ecosystem.

Companies that understand and manage complex risks can protect revenue and stakeholders while moving to a more resilient model.

Identifying resilience parameters requires management to consider the risk of disruption beyond the boundaries of their plants and assets. A company’s ecosystem extends to key suppliers and their suppliers, to the raw materials and infrastructure on which business continuity depends (storage, delivery, logistics, packaging, power grids, fuel, etc.).

Each business relationship creates a vulnerability and you need to understand how it makes your company vulnerable. As climate change and geopolitical tensions mount, greater insight into these exposures and how to manage them will make your operations more resilient.

Marsh McLennan is building his own platform for revealing vulnerabilities. Supply His Chain He combines a sophisticated combination of mapping, data His imaging, and climate science with cutting-edge risk modeling to help clients quantify the impact of specific risks in terms of downtime and economic loss. We will help you make it. This enables executives to manage risk and develop sustainable and resilient strategies.

Risk resilience at the management, board and risk manager level emphasizes proactively making better risk-based decisions rather than reacting to crises and events.

According to the 2023 Global Risks Report, organizations should focus their resilience efforts on promoting investments in green energy, climate and nature. Improve employee health and well-being. Strengthening cyber resilience.

Especially for the green energy transition and adaptive risk mitigation strategies, it is imperative to promote investments for long-term climate resilience.

Despite increasing global investment in clean energy, expected to exceed $1.4 trillion by the end of 2022, barriers remain to the transition to a net-zero economy. However, new approaches to risk modeling, valuation and allocation could help businesses, governments and financial markets overcome these barriers and hasten the transition.

These approaches could be applied to newer energy security and sustainability projects that leverage green incentives aimed at stimulating the economy.