while finance ministers struggle to manage an economic recovery, their counterparts in the environment and trade ministries are developing their negotiating positions as they head to Copenhagen in December 2009 to try to hammer out a global agreement on climate change. In 2008, China pulled ahead of the US as the number one emitter of carbon dioxide. In 2009, however, it also topped the charts as the country to set the most ambitious target for renewable energy generation, which will be critical for shifting the country onto a low-carbon growth trajectory.
While regulators negotiate new more climate-friendly public policies, F&C has been asking companies what steps they are taking to reduce their carbon emissions and position themselves to benefit from this planned shift to a lowcarbon economy. Specifically, we asked Chinese industrial companies Shanghai Electric, China Coal Energy, and Huadian Power International to develop a climate change strategy that includes reducing emissions and shifting toward renewable energy, as well as participating in the Carbon Disclosure Project (CDP)7. Meanwhile, Japanese and Korean companies such as Panasonic and Samsung Electronics are leading the pack in developing energy-efficient products, which will be important in reducing energy demand and meeting new product requirements for customers. We met with the CEO of Japan’s Rohm to discuss how the company’s growth will be driven by plans to develop energy-efficient lighting, heating and automotive products.
In the last year, leading Asian companies have begun to raise their game in this area, laying out a clear strategy both for reducing greenhouse gas emissions and preparing their businesses for the inevitable impacts of a changing climate. Following intensive engagement with F&C over the last two years, China Mobile became the first Chinese company to publish a Green Action Plan, disclosing its total greenhouse gas emissions and setting a clear target for improving energy efficiency. Not to be outdone, its neighbour across the strait, Taiwan Semiconductor, escalated its alreadyleading climate change strategy to board level as part of its overall Enterprise Risk Management framework. But overall, these companies remain the exception rather than the rule, as indicated by the fact that only 25% of the 500 largest companies in Asia ex-Japan responded to the CDP in 2009. If Asia is to lead the world in stimulating a green economic recovery based on low-carbon growth, many more companies will need to take active steps to evaluate their own environmental performance, set targets for improvement, and disclose their climate change strategies to the market.
In September 2009, the newly-elected Japanese government stunned the business community by tripling the country’s proposed carbon reduction target from 8% to 25% by 2020 ; if this is any indication of future trends, we expect to see further pressures and incentives to drive companies to take action on climate change.
China Mobile - Calling for a sustainable growth strategy at the world's largest mobile phone company
In 2007, F&C began a wide-ranging dialogue with Chinese state-owned telecoms giant China Mobile and offered recommendations on both its sustainable development strategy and its reporting. We encouraged the company to develop a sustainability strategy that focused on its key impacts, such as:
- reaching China's poor and rural communities who ar not yet connected to the Internet and fixed line telephone grid;
- developing energy-efficient products;
- managing environmental emissions from its operations
- and protecting customers from insipient hackers and aggressive marketers.
In March 2008, China Mobile unveiled a three-year sustainability strategy, a new oversight committee and a completely overhauled sustainability report. It pledged to continue its focus on reaching China’s unconnected population, address environmental impacts associated with electronic waste and electromagnetic fields, and set an ambitious energy efficiency target of 40% by 2010. In 2009, the company also improved its systems for protecting data security and customer privacy from spam and viruses. F&C welcomed these efforts by the world’s largest mobile telephone operator, and is encouraging both its local competitors and its peers around the world to follow suit. With ambitions to expand in Europe and the Middle East, China Mobile’s ability to establish itself as a world-class company will depend on how effectively it manages its key environmental and social impacts, alongside its operational and financial performance.
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