Crystal ball-gazing for 2014

While we cannot predict the headlines for 2014, here's a look at a few key themes and issues that will mark the coming year

January often seems a good time for a spot of spring cleaning - the holiday decorations come down, desks get cleared and calendars get replaced with new ones.

Beyond the physical clean-out, this is also an opportune time for some reflection to take stock of what’s happened in the past year and look ahead. Here at Eco-Business, we recently produced a story on the top 10 stories that shaped 2013, and as 2014 gets into full swing, I thought it’d be a useful exercise to think about what the year has in store for the sustainable business community in Asia Pacific.

Of course, I’ve been a journalist far too long to think that we can ever predict the news for the year. But there are a few key themes and issues that I think will mark 2014 for those of us in this region.

World Economic Forum in Davos

That the World Economic Forum (WEF) at this month’s Davos Summit has dedicated an entire day to discussing climate change is an optimistic start to the year. The move is said to help drive business engagement with climate change risks. WEF has said it hopes that this new push will “drive the subjects of economic risk and resilience back to the top of the climate change agenda - where they belong”.

The international body is also exploring plans for a new public-private group to explore policy responses to the rapid melting being witnessed in the Arctic, and has launched a dedicated council that is “examining ways of protecting the Arctic from unsustainable development, bringing together governments, business, civil society and scientists to prevent this catastrophe”. 

Haze in Southeast Asia

Given the severe haze crisis that hit the region in 2013, all eyes this year will be on Indonesia and the palm oil industry, which has been long considered the drivers of the annual forest fire burnings and deforestation that takes place in large swathes across Indonesia during crop-clearing season.

Countries such as Singapore have indicated that domestic legislation to tackle this issue - including bringing errant firms to task - may be introduced and Asean nations have pledged to adopt a Haze Monitoring System which uses land concessions maps, satellite imagery and hotspot information to identify companies committing illegal burning and land clearances. This will have considerable impact on some of the world’s largest palm oil companies and global brands that use palm oil in their products.

China moves to address debilitating pollution

China’s plan to clean up its smog-choked cities and upgrade its industrial infrastructure will kick into gear in 2014 with the government planning to invest 1.7 trillion yuan, or more than US$ 276 billion over the next five years. 

Some specific measures include shutting any power stations within the city that burn coal - or switching them to burning cleaner gas; a lottery system with few winners to restrict the rise in the number of new cars; and a major push for renewable energy including wind, solar and hydroelectric.

Although sceptics doubt these measures will be enough to tackle the Asian giant’s environmental problems, many believe China is serious about sustainable development and will continue efforts to address its sustainability challenges. 2014 will reveal if the steps taken are adequate.

Australia’s climate policy

The world cheered when in 2007, then Prime Minister Kevin Rudd, signed Australia’s instrument of ratification of the Kyoto Protocol - the only existing global agreement to tackle climate change. But 2014 could be the year that any progress made on climate policy in the vast country with huge oil and gas and mining sectors is reversed. 

Current Prime Minister Tony Abbott has announced plans to scrap the nation’s carbon pricing laws and emissions trading scheme and although his government has defended its policy and maintained that Australia would cut its emissions by five per cent by 2020, political opponents say Abbott is a climate change denier and his climate policy is “a policy of inaction”.

How its domestic politics play out and what policies will eventually be implemented will determine if Australia will be a leader or obstacle in the international community’s efforts to tackle the climate issue.

Climate change summit in Peru

Expectations have been set up for Peru, which is hosting this year’s UN climate talks, to play a key role in determining whether the 2015 UN climate meeting in Paris will be a success or a repetition of the Copenhagen meeting in 2009 - when the world was meant to but failed to meet a deadline to ink a legal agreement to tackle climate change.  

The recently-concluded UN Climate Change Conference in Warsaw has set up a path for governments to work on a draft for a new universal climate agreement. Countries are meant to “initiate or intensify domestic preparation” for their intended national contributions towards that agreement, which will come into force from 2020. 

With the meeting set against the backdrop of Typhoon Haiyan which devastated large swathes of central Philippines in November last year, negotiators also decided to establish an international mechanism to provide most vulnerable populations with better protection against loss and damage caused by extreme weather events and slow onset events such as rising sea levels. Detailed work on the so-called “Warsaw international mechanism for loss and damage” begins this year.

The rise of corporate responsibility in Asia

One clear objective that companies should keep in mind is that corporate responsibility goes beyond CSR activities and involves a conscious move to embed sustainability in a business strategy, setting clear targets that measure sustainability, and implementing a rigorous reporting process.

Finally, I thought I should mention an interesting report by KPMG released last month which shows that in Asia Pacific, 71 per cent of the region’s leading companies now publish corporate responsibility (CR) reports, which is a jump of 22 per cent from 2011 when only less than half of the surveyed, or 49 per cent, produced such documents.

Asia Pacific’s latest numbers show that it is almost on par with Europe, where 73 per cent of companies produce CR reports. In fact, Singapore and India are leading the Asia Pacific region in corporate responsibility reporting, with the countries recording two of the highest jumps in reporting rates by its companies since 2011 compared to the rest of the world, according to the latest KPMG Survey of Corporate Responsibility Reporting 2013.

This report is notable because it mirrors what I have personally observed - that corporate responsibility has finally moved into the mainstream in Asia and we will see this reinforced in 2014. To quote KPMG Singapore’s Sharad Somani, head of climate change and sustainability services, “If anyone still thinks that Asia is a corporate responsibility dead zone, this survey is clear evidence that they should think again,

Governments and stock exchanges across Asia are moving to enforce mandatory reporting requirements - and this is a crucial move in getting companies to think critically about the sustainability of its operations. As I observed in a previous commentary after the Responsible Business Forum on Sustainable Development last November, the discourse on corporate responsibility in Asia is maturing, and in 2014, I believe we will see further development of the sustainability themes that businesses now cannot afford to ignore.

One clear objective that companies should keep in mind is that corporate responsibility goes beyond CSR activities and involves a conscious move to embed sustainability in a business strategy, setting clear targets that measure sustainability, and implementing a rigorous reporting process.

It is my hope, in the new year, to see more companies engage closely with these issues, and for a deeper collaboration to take place across the business, government and people sectors across Asia. 

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