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HSBC: Companies in Vietnam Need to Wake up to the New Normal of Climate Changes

Jonathan Drew
BizLIVE -

it can be hard to remember that climate change now represents one of the most urgent challenges facing economies, investors, businesses and societies around the world – Vietnam’s included.

HSBC: Companies in Vietnam Need to Wake up to the New Normal of Climate Changes
The Covid-19 pandemic has created severe effects on Vietnam’s economy. Many experts say that Vietnam companies no longer can expect the surrounding environment to come back to the old norm but they have to learn to adapt to the new norm. 
Apart from that, climage changes also bring in many challenges to Vietnam’s companies. Recently, Managing Director of Sustainable Finance in Asia-Pacific – HSBC, Jonathan Drew released a research report in which he analyzed the new challenges that climate changes create for Vietnam’s companies and recommend some solutions for that. Following is the research report:
Amid the COVID-19 turmoil shaking the global economy at the moment, it can be hard to remember that climate change now represents one of the most urgent challenges facing economies, investors, businesses and societies around the world – Vietnam’s included. Heat waves, floods, droughts,wildfires and typhoons have wrought havoc around the world in recent months, and the United Nations’ Intergovernmental Panel on Climate Change (IPCC)haswarned thatlarge areas of the planet will become uncultivable and unlivable -- fueling climate-related economic hardship and migration.  
The warnings arestark, and businesses that ignore the many threats that come with climate change do so at their peril. What COVID-19 has demonstrated is that our society and economic system are fragile. No one can now reasonably suggest that sustainability impacts lie beyond relevant horizons. 
But when it comes to climate, it is still difficult to link the emissions of today to the increased losses of tomorrow -- and so, despite the evidence, many companies in Asia still find it hard to recognise the magnitude and urgency of the problem, let alone act on it.
To some extent, this is understandable. After all, while it’s easy to justify spending money on repairs once a storm, wildfire or drought has struck, it’s harder to rationalisethe costs of climate-proofing production sites, office buildings or logistics systems for events that lie in the future. 
Similarly, while the immediate physical damage caused by a disasteris easy to see, the indirect, often non-physical implicationsof the worsening global environmental crisisare harder to grasp or plan for.
Those impacts, however, can be costly and profoundly disruptive.
Entire business sectors and communities could be wiped out by climate change. Think wine makers in Australia, ski resort operators in Japan, or fishing and agricultural communities in the Mekong Delta, whose way of life depends on environmental conditions that are already changingdramatically.
In areas that are simply vulnerable to the effects of global warming, insurance premiums stand to rise significantly at the same time as property valuations fall. 
Shifting consumer, investor and regulator expectations also pose reputational, policy, regulatory and legal risks to business. Some nations are now discussing introducing taxes on meat and plastic packaging, for example – measures that would have been inconceivable just a few years ago –,  while the rise of everything from vegan foods and ocean-friendly sunscreens to electric vehiclesshows that consumers increasingly care about the environmental and social credentials of what they buy.  
Meanwhile, analysts at pension funds and asset managers are already calculating the long-term risks to industries that fail to move away from high-carbon, high-polluting activities – anticipating that changing laws and attitudes may make it expensive to raise capital or access new markets, if not put them out of business altogether. And the evidence that stronger ESG produces stronger financial performance is growing, pre COVID and through COVID.
So while governments and multilateral organisations are making long-term plans to combat global emissions and pollution, it is manifestly in companies’ own interests to step up efforts to helpfight our society’s climate emergency.
This is particularly the case in Asia, which is especially vulnerable. Failure to combat the effects of global warming now could severely dent and probably deny this region’s growth opportunity. YetHSBC’s 2019 annual Sustainable Financing and Investing Surveyshowed that,while encouraging progress has been made, Asian financial markets are still not as environmentally and socially aware as those in other regions. 
So,whether you are in resources, real estate, retailing or financial services,here are some thoughts:
Think short-term andlong-term:Decisions made today impact the future. Climate change is not just about the next storm or flood. It is systemic, all-encompassing, and here to stay. Fast forward 10, 20 or 30 years, and the heat waves, droughts, storms, and floods we’ve seen in recent years– plus mounting pollution and much-reduced biodiversity, and resulting increased social disturbances,will be the norm.
Think holistic: Addressing just one aspect of your operation is not enough. Review everything from electricity usage and property portfolios, to where you source materialsand how you package and ship products, to your operational preparedness for weather-linked disasters. This means engaging with all layers of your organisation. And it means embedding “green” and “social” issuesinto allyour business and investment decision making.
Think global: Melting glaciers and rising sea levels are not just bad news for the inhabitants of Greenland or Tuvalu. Theyhave global implications. In today’s interconnected world, there’s no such thing as far away.
Stay up to date: The debate on climate moves fast. Technological changes and green innovationscould put more low-carbon alternatives and opportunities within your reach. Stay abreast of the regulatory environment, sustainable financing options and evolving investor and customer expectations. Climate-friendly action willlift – not drag down --your profits and reputationin surprisingly short time frames.
Act now and lead by example. It takes time to climate-proof a factory or office building,switch a fleet of delivery trucks to electric, source more sustainably-developed goods, or change consumption habits. Business strategies and product line-upscan’t be shifted overnight. But we can all at least start the process now, not next week, or next year. Failure to act now means the legacy of this generation may irreversibly beseen as one of failure. We can do so much better.

JONATHAN DREW